CERTIFICATE

This is to certify that the project entitled INDUSTRIAL RELATION is an original piece of or! done "y #anoj $%&ar 'radhan and is s%"&itted in partial f%lfill&ent of &aster in "%siness ad&inistration This project has "een carried o%t %nder &y g%idance and s%per(ision ) #s T%li!a singh *ac%lty c&s DECLARATION I + #anoj $%&ar 'radhan here"y declare that the project report titled INDUSTRIAL RELATION has "een s%"&itted "y &e in partial f%lfill&ent of &aster in "%siness ad&inistration fro& centre for &anage&ent st%dies+) I here"y declare that this project is the res%lt of &y o n effort )

Signat%re #anoj $%&ar 'radhan

Acknowledgement

I a(ail this opport%nity to place &y profo%nd sense of gratit%de to &y fac%lty, ms Tulika singh+ for her constant s%per(ision+ inspiration and enco%rage&ent+ right fro& the "eginning of the project report entitled INDUSTRIAL RELATION) Signat%re #anoj $%&ar 'radhan

INTRODUCTION
The p%rpose of this project is+ first+ to pro(ide an o(er(ie of e(ents ,so&e of the& e-ternal to the ind%strial relations syste&. hich ha(e infl%enced+ or are infl%encing+ the de(elop&ent of ind%strial relations) La"or relations sho%ld "e seen as an essential part of &anage&ent syste&s and techni/%es+ and not as a discipline or acti(ity apart fro& &anage&ent) It then see!s to e-plain hat so%nd ind%strial relations and la"or relations policy for&%lation are+ and thereafter to %nderline the i&portance and o"jecti(es of so%nd ind%strial relations in the c%rrent 0 and to so&e e-tent the f%t%re conte-t) It ne-t e-a&ines the role of (ario%s syste&s and &echanis&s at different le(els as their contri"%tion to pro&oting so%nd ind%strial relations) It also atte&pts to identify so&e of the ele&ents hich &ay generally "e regarded as feat%res of a good ind%strial relations syste&) It is not s%ggested that all these ele&ents sho%ld co0e-ist in a syste& for it to /%alify as a so%nd one+ "%t rather it is intended to point o%t a(aila"le options hich can help to transfor& a confliction syste& into a &ore cooperati(e one) *inally+ the 'aper identifies c%rrent iss%es in ind%strial relations) The present trend in la"o%r relations and h%&an reso%rce &anage&ent is to place greater e&phasis on e&ployee in(ol(e&ent+ har&onio%s e&ployer 0 e&ployee relations and &echanis&s+ and on practices hich pro&ote the&) One of the i&portant conse/%ences of glo"ali1ation and intense co&petition has "een the press%re on fir&s to "e fle-i"le) Enterprises ha(e so%ght to achie(e this in t o ays) *irst+ thro%gh technology and a &%ch ider or!er s!ills "ase than "efore in order to enhance capacity to adapt to &ar!et changes) Second+ "y introd%cing a range of e&ployee in(ol(e&ent sche&es ith a (ie to increasing la"o%r0&anage&ent cooperation at the shop floor le(el+ necessary to achie(e prod%ct and process inno(ation) Achie(ing fle-i"ility does not depend on the a"sence of %nions) Organi1ation fle-i"ility depends %pon tr%st "et een la"o%r and &anage&ent) It i&plies that or!ers are illing to forego efforts to esta"lish and enforce indi(id%ally or thro%gh collecti(e action s%"stanti(e or! r%les that fi- the allocation of or!+ transfer a&ong jo"s+ and or!loads) Organi1ational fle-i"ility also i&plies that or!ers are illing to disclose their proprietary !no ledge in order to increase la"o%r prod%cti(ity and the fir&2s capacity for inno(ation3

None of these shifts is feasi"le itho%t a s%"stantial change in traditional &odes of dealing ith people in an enterprise)

Industrial Relations Theories and Attitudes

At its inception+ the la"o%r &ar!et as do&inated "y the classical econo&ics (ie hich espo%sed free and %nreg%lated la"o%r &ar!ets) This laisse10faire capitalis& led to social inj%stices and ine/%ities since la"o%r did not ha(e the po er to "argain ith e&ployers on ter&s hich e(en approached a degree of e/%ality in "argaining strength) Ind%strial relations+ therefore+ initially ca&e to espo%se a degree of la"o%r &ar!et reg%lation to correct this %ne/%al "argaining po er) 4onse/%ently ind%strial relations de(eloped in the conte-t of the theory that pro"le&s in la"o%r relations e&anate largely fro& &ar!et i&perfections hich operate against the interests of la"o%r and ca%se i&"alances in the po er relationships of e&ployers and e&ployees) These i&perfections ere e-ternal to the enterprise) Additionally+ the do&inant position of the e&ployer in hat as for&erly called the 3&aster and ser(ant3 relationship pre(ented la"o%r fro& enjoying rights) These ca%ses for la"o%r pro"le&s 0 e-ternal and internal to the enterprise 0 needed to "e addressed thro%gh a range of initiati(es+ "oth "y the State thro%gh protecti(e la"o%r la s+ conciliation and disp%te settle&ent &achinery+ "y (ol%ntary action on the part of e&ployees to protect the&sel(es and f%rther their interests thro%gh trade %nionis& ,"%t "ac!ed "y State inter(entions to g%arantee this right in the for& of freedo& of association.+ and "y redressing the "alance of po er ,thro%gh collecti(e "argaining.) The foc%s on relations e-ternal to the enterprise 0 especially thro%gh national and ind%stry le(el collecti(e "argaining 0 as initially elco&ed e(en "y e&ployers in se(eral ind%striali1ed co%ntries "eca%se it red%ced co&petiti(e ad(antage "ased on la"o%r costs) 5esides+ collecti(e "argaining in partic%lar transferred one of the &ost conflict%al aspects of the e&ploy&ent relationship 0 ages 0 o%t of the or!place+ and &ade it the responsi"ility of the respecti(e representati(es of e&ployers and e&ployees) Unions nat%rally elco&ed it as it ga(e the& an infl%ential "ase o%tside the or!place) 6hen 2transferred2 to de(eloping co%ntries+ this concept so&eti&es had disastro%s conse/%ences "eca%se it facilitated the politici1ation of %nions) #oreo(er+ the or!a"ility of a syste& of ind%strial relations in hich the e&phasis as on decisions o%tside the enterprise pres%pposes a high degree of literacy+ ed%cation and a areness a&ong e&ployees a"le to &onitor the actions of their representati(es operating at a le(el a re&o(ed fro& the or!place) 7o e(er+ reg%lation of the e-ternal la"o%r &ar!et did not necessarily address all the ca%ses of la"o%r pro"le&s) A &ore pl%ralistic (ie recogni1ed that la"o%r pro"le&s or iss%es do not relate only to conflict "et een e&ployers and e&ployees) They incl%de &any other for&s of pro"le&s s%ch as lo prod%cti(ity+ a"senteeis&+ high la"o%r t%rno(er+ lac! of jo" sec%rity+ %nsatisfactory or %nsafe or!ing conditions+ non recognition of perfor&ance in standardi1ed age syste&s+ and lac! of &oti(ation) #any of these pro"le&s cannot "e addressed thro%gh &eas%res directed p%rely at the e-ternal la"o%r &ar!et+ and re/%ire &eas%res to "e ta!en ithin the enterprise) Therefore another (ie + e&anating fro& h%&an reso%rce &anage&ent and increasingly i&portant since the 89:;s+ is that la"o%r pro"le&s arise not so &%ch fro& factors e-ternal to the enterprise+ as fro& %nsatisfactory &anage&ent of h%&an reso%rces ithin the enterprise) 4orrecti(e

action sho%ld incl%de the installation of h%&an reso%rce &anage&ent policies and practices e&"odied in concepts s%ch as recr%it&ent and selection+ leadership and &oti(ation+ e&ployee de(elop&ent and retention+ etc) The o"jecti(e is to ens%re a con(ergence of organi1ational and indi(id%al goals+ and to "alance indi(id%al and organi1ational needs) 6ith the press%res on enterprises to adapt and change+ it is not s%rprising that e&ployers are p%shing for greater concentration on iss%es at the enterprise le(el) In the final analysis the /%ality of an ind%strial relations syste& has to "e j%dged "y ho it or!s in practice 0 and that &eans at the or!place le(elThis relati(e neglect pro(ided the 2space2 for the rise of h%&an reso%rce &anage&ent) Neither (ie is entirely correct or entirely incorrect+ "eca%se ind%strial relations pro"le&s do flo fro& circ%&stances "oth e-ternal and internal to the enterprise) The pro"le& is that there has "een o(er0e&phasis on the en(iron&ent e-ternal to the enterprise+ so that inade/%ate attention has "een paid to the policies and practices needed ithin the enterprise) As a res%lt+ e &ay ha(e lost sight of the fact that in the final analysis so%nd la"o%r relations ha(e to "e "%ilt %p fro& ithin an organi1ation) The en(iron&ent e-ternal to the enterprise sho%ld "e facilitati(e+ and at ti&es 3protecti(e3 in the sense that it needs to prescri"e certain "asic standards relating to s%ch areas as social sec%rity+ safety and health+ freedo& of association+ ee!ly and other holidays and rest periods+ etc) In &ore recent ti&es ind%strial relations has "een infl%enced "y other social sciences s%ch as organi1ational psychology and "eha(io%r) Traditionally econo&ics and la ere t o &ain infl%ences on ind%strial relations+ hich led to a concentration on &acro le(el ind%strial relations+ and therefore on %nions+ go(ern&ent and collecti(e "argaining) Organi1ational "eha(io%r has "een infl%enced "y psychology hich centres on the indi(id%al+ and "y social psychology hich foc%ses on relationships "et een people and on gro%p "eha(io%r) It is easy to see+ therefore+ hy h%&an reso%rce &anage&ent has "een infl%enced "y organi1ational "eha(io%r) 'arado-ically ind%strial relations+ tho%gh dealing ith 2relation2+ has %ntil recently largely ignored the social sciences rele(ant to "eha(io%r and h%&an relations) 6hile la"o%r pro"le&s are the res%lt of i&perfections in the e&ploy&ent relationship+ ind%strial relations sho%ld "e seen as the theories and &ethods hich ha(e "een de(eloped o(er ti&e to address and correct these pro"le&s+ in "oth the e-ternal and internal la"o%r &ar!ets) D%ring the past decades la"o%r relations as (ie ed "y go(ern&ents as a &eans of pre(enting or &ini&i1ing conflict) In So%th and So%th East Asia this o"jecti(e as achie(ed thro%gh disp%te pre(ention and settle&ent &echanis&s e-ternal to the enterprise ,e)g) conciliation+ ar"itration and la"o%r co%rts.) In So%th Asia the o"jecti(e as also achie(ed thro%gh restrictions or prohi"itions on the freedo& of action of e&ployers in &atters s%ch as ter&ination of e&ploy&ent+ clos%res and e(en transfers of e&ployees) On the other hand+ se(eral So%th East Asian co%ntries resorted to &eas%res to restrict trade %nion action and to control %nions+ as ell as to a(oid %nion &%ltiplicity) 6hile in So%th Asia the foc%s of ind%strial relations as on e/%ity fro& the point of (ie of or!ers and %nions+ in So%th East Asia the e&phasis as on econo&ic efficiency and less on or!er protection la s) Lo %nioni1ation in &any Asian co%ntries+ strong go(ern&ents in So%th East Asian co%ntries and So%th $orea+ and perceptions that %nions co%ld "e potential

o"stacles to the direction of econo&ic de(elop&ent led to a relati(e neglect of ind%strial relations) #oreo(er+ hierarchical &anage&ent syste&s and respect for a%thority+ hich ha(e &irrored the e-ternal social syste&+ ha(e "een inconsistent ith cons%ltation+ t o0 ay co&&%nication+ and e(en ith the concept of negotiating the e&ploy&ent relationship) <apan+ ho e(er+ as an e-ception here+ since the 89=;s+ or!place relations and fle-i"ility facilitated "y enterprise %nionis& do&inated ind%strial relations in the larger enterprises) A%stralia and Ne >ealand contin%ed to foc%s on centrali1ed ind%strial relations+ tho%gh the e&phasis has radically changed in Ne >ealand d%ring this decade+ and is changing in A%stralia) 5%t &ajor changes are ta!ing place in Asia) E&ployers as ell as so&e go(ern&ents are (ie ing la"o%r relations fro& a &ore strategic perspecti(e i)e) ho la"o%r relations can contri"%te to and pro&ote or!place cooperation+ fle-i"ility+ prod%cti(ity and co&petiti(eness) It is increasingly appreciated that ho people are &anaged i&pact on an enterprise2s prod%cti(ity and /%ality of goods and ser(ices+ la"o%r costs+ /%ality of the or!force and its &oti(ation+ and on the pre(ention of disp%tes as ell as on aligning e&ployee aspirations ith enterprise o"jecti(es)

A SOUND INDUSTRIAL RELATIONS S?STE# AT T7E NATIONAL AND INDUSTR? LE@EL

La"o%r0&anage&ent relations policy for&%lation is one of the significant tas!s at the national le(el+ and its s%ccessf%l for&%lation and i&ple&entation can infl%ence the la"o%r relations cli&ate at the ind%stry and enterprise le(els) S%ch policy for&%lation+ ho e(er+ can "e for&%lated not only at the national le(el thro%gh a tripartite process+ "%t also at the ind%stry le(el on a "ipartite "asis as "et een e&ployers2 and or!ers2 organi1ations) 6hether "ipartite policy for&%lation "eco&es a part of national policy depends largely on the respecti(e strengths of e&ployers2 and or!ers2 organi1ations) In so&e of the ind%striali1ed &ar!et econo&ies there is a greater li!elihood than in de(eloping co%ntries of "ipartite policy for&%lations "eing reflected in national policies d%e to the strength of the e&ployers2 and or!ers2 organi1ations) In S eden+ for instance+ in the past+ the agree&ents "et een the %nion and the e&ployers2 organi1ation tended to "e translated into national policy instr%&ents) The policies and &ethods of training of or!ers+ for e-a&ple+ reflected hat the t o social partners had identified as appropriate for the ind%stry) Or again+ in 5elgi%& the State recogni1es the t o social partners as the &ain for&%lators of social policy thro%gh collecti(e "argainingA e(en the social sec%rity syste& is &anaged "y the t o social partners) The per(asi(e infl%ence of "ipartite arrange&ents is felt only here there is a 2"alance of po er2 "et een the social partners) There is less li!elihood of "ipartis& i&pacting on national policy for&%lation in de(eloping co%ntries d%e to strong central go(ern&ents in &any cases+ and their ass%&ption of the role of identifying the direction of econo&ic and social policies) The relati(e ea!ness of e&ployers2 and or!ers2 organi1ations or of one of the&+ or the ina"ility of s%ch organi1ations to agree on the f%nda&entals of hat the la"o%r relations policy sho%ld "e+ often pre(ents "ipartis& fro& infl%encing national policy for&%lation)

Tri artism and La!our "olic# Formulation

Tripartis& is the process thro%gh hich the fo%ndation for a so%nd ind%strial relations syste& can "e laid at the national le(el) Ideally+ tripartis& is the process here"y the go(ern&ent+ the &ost representati(e or!ers2 and e&ployers2 organi1ations as independent and e/%al partners+ cons%lt ith each other on la"o%r &ar!et and related iss%es hich are ithin their spheres of co&petence+ and jointly for&%late and i&ple&ent national policies on s%ch iss%es) 7o e(er+ this ideal sit%ation is seldo& reflected in practice+ especially in de(eloping co%ntries or in societies ith fairly a%thoritarian go(ern&ents hich "elie(e that the direction of econo&ic and social de(elop&ent is largely their responsi"ility) A &ore realistic &odel here de(eloping co%ntries are concerned is one in hich a go(ern&ent cons%lts the &ost representati(e e&ployers2 and or!ers2 organi1ations on la"o%r &ar!et and related iss%es hich are ithin their spheres of co&petence+ and ta!es acco%nt of their (ie s in national policy for&%lation and its i&ple&entation) There are &any e-a&ples of tripartite &echanis&s at the national le(el+ as ell as infor&al applications of tripartis&) In &any co%ntries there are &ini&%& age fi-ing "odies hich reflect the participation of all three parties+ often leading to a consens%s on &ini&%& ages+ and so&eti&es on other &ini&%& ter&s of e&ploy&ent) In so&e co%ntries ,as in A%stralia in recent years.+ agree&ents are reached at the national le(el a&ong the three partners after a process of "argaining on i&portant social policy iss%es) The principles agreed %pon in the 89B;s in <apan as a forer%nner to its prod%cti(ity &o(e&ent did &%ch to ards assisting that co%ntry2s prod%cti(ity gro th) In <apan+ the Ind%stry and La"o%r 4onference has "een a &ajor for& of cooperation at the national le(el+ and cons%ltati(e &echanis&s ,"oth tripartite and "ipartite. e-ist at the ind%stry le(el) In Singapore the National 'rod%cti(ity 5oard is a tripartite "ody+ and is credited ith &%ch of the s%ccess in prod%cti(ity i&pro(e&ent there) Tripartite participation in Singapore2s National 6age 4o%ncil has a(oided a potential conflict on ages) The introd%ction of a fle-i"le age syste& in Singapore as &ade possi"le "y a tripartite approach to ards reaching a consens%s on the iss%e in the late 89:;s) At the national le(el the &echanis&s and proced%res co%ld "e either for&al and instit%tionali1ed+ or else infor&al and ad hoc) 6here the la"o%r ad&inistration syste& cons%lts+ on an ad hoc "asis+ or!ers2 and e&ployers2 organi1ations on s%"jects falling ithin their p%r(ie + it represents a &ethod of policy for&%lation on la"o%r &anage&ent relations) So&eti&es these cons%ltations &ay ta!e place "et een the t o social partners and other p%"lic a%thorities) *or instance+ a finance &inistry &ay cons%lt the social partners on an iss%e relating to age policy) National le(el policy for&%lation can ta!e place thro%gh instit%tions hich pro(ide for periodic tripartite disc%ssion and cons%ltation) There are also e-a&ples of instit%tions ith f%nctions li&ited to a partic%lar s%"ject &atter s%ch as training+ social sec%rity+ &ini&%& ages ,for instance &ini&%& age fi-ing "odies. and safety and health) S%ch

speciali1ed "odies &ay e(en co(er collecti(e "argaining+ as in the case of the Singapore National 6age 4o%ncil created in 89CD+ hich as e&po ered to iss%e ann%al g%idelines to coordinate collecti(e "argaining ith o(erall econo&ic policy so as to ens%re that ages re&ain consistent ith econo&ic de(elop&ent) La"o%r &anage&ent relations policy for&%lation &ay ta!e place and "e reflected in "asic agree&ents or codes or ind%strial relations charters in hich all three parties in the la"o%r relations syste& ha(e participated) So&e s%ch agree&ents &ay "e "ipartite+ and &ay co(er a (ariety of s%"jects incl%ding principles and proced%res of la"o%r relations s%ch as freedo& of association+ trade %nion recognition+ collecti(e "argaining+ la"o%r0 &anage&ent cooperation &echanis&s+ proced%res for the pre(ention and settle&ent of disp%tes+ etc) The 89:E A%stralian national consens%s ,Accord. and the s%cceeding Accords on econo&ic /%estions a&ong the go(ern&ent+ trade %nions and e&ployers contri"%ted to ards increased e&ploy&ent and profits+ and a red%ction in the days lost on acco%nt of stri!es) Other e-a&ples incl%de the agree&ents negotiated "y the Tripartite La"o%r 4onference in India ,in partic%lar the 4ode of Discipline of 89B:.+ the 4ode of 'ractice for Ind%strial 7ar&ony ,#alaysia 89CB.+ the 4ode of 'ractice for the 'ro&otion of La"o%r Relations ,Thailand 89:8.+ the 'ancasila La"o%r Relations ,Indonesia. and the la"o%r policies res%lting fro& tripartite cons%ltations in 'a!istan) Referring to the fail%re to i&ple&ent so&e of these last &entioned arrange&ents <) Schregle points o%tF 37o e(er+ fail%re in practical i&ple&entation is not necessarily a (alid arg%&ent against the concept as s%ch of "asic agree&ents or negotiated ind%strial relations charters or codes of cond%ct) The (ery idea of reaching agree&ent on these &atters "et een the social partners is in line ith a for ard0loo!ing tripartite approach to la"o%r relations) The alternati(e is legislation and increased go(ern&ent inter(ention+ a proposition to hich &ost e&ployers+ and also &any trade %nions+ in the region o%ld o"ject as a &atter of principle) So the only re&edy is to i&pro(e the practical application of "asic agree&ents "y delegating &ore po er and a%thority to the central "odies of e&ployers2 and or!ers2 organi1ations)3 The desire to for&%late and practice a tripartite approach to the sol%tion of social policy iss%es depends (ery &%ch on the e-istence of a (al%e syste& in a society hich %nderpins the hole syste&+ and reflects an acceptance of the principles of cooperation+ cons%ltation and+ &ost i&portant+ pl%ralis&) S%ch a (al%e syste& generally operates in the ind%striali1ed &ar!et econo&ies) In societies here a tradition of de&ocracy is a"sent so is tripartis&+ or else it tends to "e a 2cos&etic2 e-ercise) The contri"%tion hich tripartis& can &a!e to the esta"lish&ent of a so%nd ind%strial relations syste& can hardly "e o(er0e&phasi1ed) Tripartis&2s rationale is to "e fo%nd in the principle of de&ocracy+ the essence of hich is a sharing or diff%sion of po er flo ing fro& the enco%rage&ent or recognition of (ario%s press%re gro%ps in a society as an effecti(e safeg%ard against the centrali1ation of po er) It has "een aptly re&ar!ed that 3e(ery so%rce of independent po er in a de&ocracy is part of its strength+ so long as it can "e g%ided to see! its o%tlet thro%gh the de&ocratic political syste&3)Tripartis& as a process is a part of a pl%ralistic o%tloo! on society thro%gh hich sta"ility is &aintained+

freedo& of association "eing the sine /%a non+ "eca%se itho%t the right of association the interest gro%ps in a society cannot f%nction effecti(ely) As e-pressed "y 7)A) 4legg pl%ralis&2s 3the&e is that &en associate together to f%rther their co&&on interests and desiresA their associations e-ert press%re on each other and on the go(ern&entA the concessions hich follo help to "ind society togetherA thereafter sta"ility is &aintained "y f%rther concessions and adj%st&ents as ne associations e&erge and po er shifts fro& one gro%p to another) 3 Acceptance of the principle of sharing po er entails recognition of the fact that capital and la"o%r represent t o i&portant press%re gro%ps in society+ if for no other reason than that "oth of the& ta!en together are the principal pro(iders of goods and ser(ices and ealth0creators in a &ar!et econo&y) $O%E CURRENT INDU$TRIAL RELATION$ I$$UE$ E&ployers are no co&pelled to (ie ind%strial relations and h%&an reso%rce &anage&ent fro& a strategic perspecti(eA in other ords+ not only fro& the traditional (ie point of negotiating ter&s and conditions of e&ploy&ent and perfor&ing a personnel and elfare f%nction) Ind%strial relations and h%&an reso%rce &anage&ent are directly rele(ant to co&petiti(eness+ and ho they are &anaged ill i&pact on enterprise perfor&ance e)g) its prod%cti(ity and /%ality of goods and ser(ices+ la"o%r costs+ /%ality of the or!force+ &oti(ation+ pre(ention of disp%tes and not only their settle&ent+ and aligning e&ployee aspirations ith enterprise o"jecti(es)

%inimum &ages
In co%ntries hich ha(e a legal &ini&%& age three concerns are e(ident) The first is that &ini&%& age le(els so&eti&es tend to "e fi-ed on e-traneo%s considerations ,e)g) political.+ or on inade/%ate data needed to define the le(el of ages) The second concern is that s%ch instances ha(e an ad(erse effect on co&petiti(eness in the glo"al &ar!et and on e&ploy&ent creation here the &ini&%& age is fi-ed a"o(e a certain le(el ,&%ch of the contro(ersy relates to hat that le(el is.) Therefore &any e&ployers prefer to see the &ini&%& age+ if there is to "e one at all+ as a 2safety net2 &eas%re to %plift those li(ing "elo the po(erty line) The third concern relates to increases in &ini&%& ages not "eing &atched "y prod%cti(ity gains hich help to offset increased la"o%r costs)

Fle'i!le("er)ormance "a#
#any e&ployers+ and e(en so&e go(ern&ents+ ha(e e-pressed a ish to re(ie traditional criteria to deter&ine pay le(els s%ch as the cost of li(ing and seniority) 'ay syste&s hich are fle-i"le ,i)e) "ased on profita"ility or prod%cti(ity. so as to "e a"le to a"sor" "%siness do nt%rns and also re ard perfor&ance+ are recei(ing considera"le attention) One &ajor pro"le& in this regard is ho e&ployees and their organi1ations can "e pers%aded to negotiate on pay refor&) The o"jecti(es of pay refor& ill not "e achie(ed %nless refor&s are the res%lt of consens%al agree&ent and are part of a larger

h%&an reso%rce &anage&ent strategy and change in h%&an reso%rce &anage&ent syste&s)

Cross*Cultural %anagement
Asia is a heterogeneo%s region+ characteri1ed "y ethnic+ c%lt%ral+ ling%istic and religio%s di(ersity) D%e to s%"stantial increases in in(est&ent in Asia fro& "oth Asian and 6estern in(estors+ &any e&ployers and %nions are dealing ith or!ers and e&ployers fro& "ac!gro%nds and c%lt%res different to their o n) #any of the res%lting pro"le&s and iss%es ,reflected for instance in the proliferation of disp%tes d%e to cross c%lt%ral 2&is&anage&ent2. fall ithin the concept of cross0c%lt%ral &anage&ent) The pro"le&s arise d%e to differences in ind%strial relations syste&s+ attit%des to and of %nions+ or! ethics+ &oti(ational syste&s and leadership styles+ negotiating techni/%es+ inappropriate co&&%nication+ cons%ltation and participation proced%res and &echanis&s+ (al%es ,the "asic "eliefs that %nderpin the ay e thin!+ feel and respond.+ e-pectations of or!ers and interpersonal relationships) These cross0c%lt%ral &anage&ent iss%es in t%rn pose the follo ing pro"le&sF i) 6hat partic%lar ind%strial relations and h%&an reso%rce &anage&ent considerations at the regional+ s%"0regional and co%ntry le(el affect the de(elop&ent of so%nd relations at the enterprise le(el in a cross0c%lt%ral en(iron&ents 6hat o%ld "e the &ost effecti(e progra&&es for this p%rpose2)G 7o can in(estors in Asia fa&iliari1e the&sel(es ith the en(iron&ental and c%lt%ral considerations in the recipient co%ntry rele(ant to their &anaging people at or!G 7o co%ld infor&ation "e collected+ analy1ed and disse&inatedG

ii) iii) i()

Dis ute "re+ention

#ost co%ntries ,other than those in transition to a &ar!et econo&y. ha(e long0standing disp%te settle&ent proced%res at the national le(el ,conciliation+ ar"itration+ ind%strial or la"o%r co%rts.) Essential as these are+ they operate only hen a disp%te arises) E/%ally i&portant are disp%te pre(ention thro%gh co&&%nication+ cons%ltation and negotiation proced%res and &echanis&s hich operate largely at the enterprise le(el) They are not partic%larly co&&on in &any Asian enterprises) Their i&portance has increased in the c%rrent decade hen changes in the ay organi1ations are str%ct%red and &anaged ha(e created the potential for or!place conflict) A &ore positi(e &o(e&ent fro& personnel &anage&ent to strategic h%&an reso%rce &anage&ent is called for)

Industrial Relations(,uman Resource %anagement Training

Not &any de(eloping co%ntries in the region ha(e facilities for training in la"o%r la and ind%strial relations 0 negotiation+ age deter&ination+ disp%te pre(ention and settle&ent+ the se(eral aspects of the contract of e&ploy&ent+ and other related s%"jects s%ch as

safety and health) #ore facilities are pro"a"ly a(aila"le in h%&an reso%rce &anage&ent ,the distinction is "eco&ing increasingly thin.) Since ind%strial relations ha(e ass%&ed a partic%larly i&portant role in the conte-t of glo"ali1ation+ str%ct%ral adj%st&ent and in the transition to a &ar!et econo&y+ e&ployers in each co%ntry o%ld need to identify hat aspects of ind%strial relations and h%&an reso%rce &anage&ent sho%ld "e accorded priority+ ho training in the& co%ld "e deli(ered+ and hat concrete role is e-pected fro& the e&ployers2 organi1ation)

Freedom o) Association, La!our Rights and Changing "atterns o) &ork

6ith the disappearance of &ajor ideological differences ith the end of the cold ar+ %nions are &o(ing to ards a concentration on their core ind%strial relations f%nctions and iss%es) In so&e Asian co%ntries freedo& of association+ incl%ding la"o%r rights in special econo&ic 1ones+ has arisen as an iss%e) The need for e&ployees and their representati(es to "e in(ol(ed in change and in transition+ and the illingness of e&ployers to in(ol(e the&+ is an e&erging iss%e in &any Asian co%ntries) 4hanging patterns of or! ,e)g) &ore ho&e or!+ part0ti&e or!+ s%"0contracting. ha(e created concerns for %nions in partic%lar) <o" insec%rity+ social sec%rity and &ini&%& conditions of or! are so&e of the&) Traditional ind%strial relations syste&s "ased on the concept of a f%ll0ti&e e&ployee or!ing ithin an enterprise is increasingly inapplica"le to the &any categories of people or!ing o%tside the enterprise) In so&e co%ntries in ter&s of n%&"ers they are li!ely in the f%t%re to e-ceed those or!ing ithin an enterprise) Ind%strial relations in the p%"lic sector 0 especially in the p%"lic ser(ice 0 here negotiation rights+ for instance+ are less than in the pri(ate sector+ is also li!ely to "e an iss%e in the f%t%re)

&omen
The increasing infl%- of o&en into or!forces has raised iss%es relating to gender discri&ination+ "etter opport%nities for the& in relation to training and higher0inco&e jo"s and elfare facilities)

%igration
There is a large &igration of la"o%r fro& la"o%r s%rpl%s to la"o%r shortage co%ntries in Asia) A&ong the iss%es hich ha(e arisen are their legal or illegal stat%s , hich &ay affect their rights.+ trade %nion rights and their access to the sa&e le(el of pay as nationals) Social sec%rity for &igrant or!ers is one of the &a or pro"le&s as &any recei(ing co%ntries do not e-tend the "enefits of social sec%rity to the&)

,uman Resource %anagement

6ith increasing reliance "y e&ployers in Asia on h%&an reso%rce &anage&ent as a &eans of enhancing enterprise perfor&ance and co&petiti(eness+ i&portant conse/%ences ill arise for ind%strial relations and for %nions) 6hat part %nions can and ill play in h%&an reso%rce &anage&ent and hether ind%strial relations and h%&an reso%rce &anage&ent ill operate as parallel syste&s ,if so hat their respecti(e roles ill "e. or "eco&e integrated ,especially since the distinction "et een ind%strial relations and h%&an reso%rce &anage&ent is "eco&ing "l%rred. are so&e of the iss%es hich ill ha(e to "e addressed)

Transition Economies
In co%ntries in transition to a &ar!et econo&y &ajor challenges and iss%es ha(e arisen+ principally "eca%se they are see!ing to adapt to an ind%strial relations syste& in hich+ for instance+ e&ployers2 organi1ations and %nion pl%ralis& ere %n!no n) Unions in s%ch econo&ies &ay play a elfare role+ and so&eti&es a s%per(isory one+ rather than a negotiating role) #anage&ents and %nions in s%ch a syste& participate not so &%ch in deciding ter&s and conditions of e&ploy&ent+ "%t in applying decisions hich are largely &ade o%tside the enterprise) There is less scope in a centrally planned econo&y for tripartite dialog%e "et een go(ern&ent on the one hand and independent organi1ations of or!ers and e&ployers on the other) In a &ar!et econo&y decisions are for the &ost part &ade ithin the enterprise+ and here they are &ade e-ternally+ they are generally the res%lt of disc%ssions ith or!ers2 and e&ployers2 organi1ations representing the interests of their &e&"ers (is0a0(is each other and ith the go(ern&ent) The go(ern&ent creates the fra&e or! in hich the social partners are cons%lted on &atters directly affecting the interests they represent+ and the social partners see! to infl%ence the econo&ic and social policy for&%lated) La"o%r relations are "ased largely on the principle of negotiation "et een the t o social partners+ and the o%tco&es are %s%ally recogni1ed "y the State so long as they do not conflict ith national la s or ith f%nda&ental national policy) Another reason for the critical role of ind%strial relations in an econo&y in transition is the a"sence or inefficiency generally+ d%ring the process of transition+ of safeg%ard &echanis&s ,s%ch as for disp%te pre(ention and settle&ent. at the national+ ind%stry and enterprise le(els+ to channel differences and disp%tes into peacef%l &eans of resol%tion) The disp%tes therefore can in(ol(e considera"le or! disr%ptions and so%r the en(iron&ent needed to achie(e so%nd ind%strial relations+ and there"y also retard the achie(e&ent of o(erall de(elop&ent o"jecti(es) In these circ%&stances co%ntries in transition to a &ar!et econo&y are addressing a range of pro"le&s s%ch asF the role of e&ployers2 and or!ers2 organi1ationsA national policy for&%lation thro%gh a tripartite processA a la"o%r la syste& rele(ant to the ne econo&ic en(iron&entA &ethods and criteria in age deter&inationA disp%te pre(ention and settle&ent proced%res and &echanis&sA and &anaging p%"lic sector enterprises in a co&petiti(e en(iron&ent)