0 Employee Relations Copyright 2000 - South-Western College Publishing.

1

Employee Relations

Copyright 2000 - South-Western College Publishing

Copyright 2000 - South-Western College Publishing Module 26 - 2

Overview Core Concepts

• Key Actors

• Employees and Unions

• Employers and Associations

• Government

• Institutions

• Collective Bargaining

• Culture

Strategic Issues Case Applications

• Germany

• Korea


Employees and Labor Unions

How did unions evolve? Political or business unionism Level of collective bargaining Power of labor unions

• Ability to mobilize members• Institutional security• Union density• International linkages


Employers and Employers’ Associations What encouraged employers to associate? Do they engage in collective bargaining? Power of employers’ associations:

• Employer association density• Membership cohesion• Comprehensiveness of association


Government

Three types of government roles in employment relations:• The passive state• Active state involvement• Statism


Collective Bargaining

Who determines or negotiates the terms and conditions of employment?

At what level does bargaining occur? What is the legal framework governing the

bargaining process? What effect has increased globalization

had on collective bargaining?


Culture Definition

Relations with IR• Determinants• Co-Relations

Benefits of Cultural Analysis• Help understanding foreign practices• Help explaining differences in IR


Culture (cont.)

Cultural Analysis (study by Hofstede, 1980)

• Individualism/Collectivism• Power Distance• Uncertainty Avoidance• Masculinity/Femininity


Culture (cont.)

Co-Relations Between Culture and IR (example)

Culture IR

Individualistic Diversity among USA Masculine institutions

Low in PD & UA Collective actions

Asian Collectivistic Homogeneity among

Countries Feminine institutions

(Korea) High in PD & UA Collective actions

avoided


Effects of Employment Relations on Workplace Practices Low union density and low government

intervention• Greater managerial autonomy to set wages

and structure jobs

National, regional, or sectoral bargaining• Low wage variation and greater

standardization of human resource practices


Effects of Employment Relations (cont.) Extensive rights of participation and

consultation by labor• Negotiated solutions to workplace practices

High government involvement in employment relations outcomes• Greater constraints on human resource

policies and practices


Case of Korea

Historical Shapes• Modern development from 1960s• Government-centered developments with a

focus on export and quantitative development• “Chaebol” as a product of the fast

development


Case of Korea (cont.)

Role of “Chaebol” in IR• Most of the Korean economy• Family owned and managed• Highly centralized and paternalistic

management• Highly unrelated diversification strategy• Strong link with the government• Heavy dependence on external funds



Drives for Changes• External Drive

• Asian economic crisis effect from 1997

• IMF agreement in 1998

• Requirement for flexible market

• Internal Drive• New government in 1998

• Drive for disaggregation of Chaebols and support of small businesses



Actors in the Korean IR• Employees and Unions

• Increased activities after the 1987 declaration

• Employment stability as the major issue

• Two associations:– Federation of Korean Trade Unions

– Korean Confederation of Trade Unions

• Allowed for political activities from 1998



Employers and Associations• Decisions highly centered in Chaebols• Less interactions across Chaebols• Association among employers:

• Korea Employers Federation

• Increased interactions among employers expected



Government• Central roles• Depression of labors for the fast development• Turnaround for new management from 1998

• Disaggregation of Chaebols

• Tripartite Commission

• Support of small businesses

• Allowance of lay-offs, etc.



Management and Training• Hierarchical and centralized structure• Less focus on individual CDP• Seniority-based systems• Changes

• Move toward performance-based and flat systems

• Training• Training institutes within Chaebols• Formal outside centers: Korean Productivity Center,

Korea Management Association


Case of Germany

Employment relations system• Sectoral bargaining between unions and

employers’ associations• Codetermination at the workplace

• Labor representatives on the supervisory board

• Work councils

• Unions enjoy quasi-public status and constitutional legitimacy

• Comprehensive employers’ associations• Large firms dominate


Case of Germany (cont.)

Effects of ER on human resources practices• High value-added production strategies• Negotiated solutions to HR problems• Diffusion of innovative HR practices


Case of Germany (cont.)

ER system can hinder the ability of companies to experiment with high performance work practices• Representative participation hinders

experimentation• Interaction of management and works council

constrained by collective agreement• Efforts being made to increase local flexibility


Strategy Development Game

Purposes• To increase analysis skill through case

application• To have opportunities to develop strategies

through teamwork• To enhance mutual understanding through

presentation and class discussion


Strategy Development Game (cont.) Structure of the Game

• Strategy Development (60 minutes)• Formation of team & warm-up (5 minutes)

• Development of strategy & action plan (45 minutes)

• Wrap-up & preparation of report (10 minutes)

• Presentation & Class Discussion (30 minutes)• Debriefing (10 minutes)


Strategy Development Game: DebriefingKOREAN MARKET Differences

• Homogeneity among the institutions• Strong influence of the government• Centralization in Chaebols• Less mobility in the labor market


Strategy Development Game: DebriefingKOREAN MARKET Action Plans

• Step 1: Starting a Business (macro-level)• Understanding the tight laws and regulations

regarding foreign businesses

• Start contacts with someone at the center of the Chaebol

• Use connections in business


Strategy Development Game: DebriefingKOREAN MARKET Action Plans

• Step 2: Managing Korean Employees• Understand the changing attitudes of people

– Collectivistic, but increased concern for individual performance

• Combine management techniques for the group and the individuals (e.g. Group incentives and individual bonus)

0 Employee Relations Copyright 2000 - South-Western College Publishing.

Documents

irculture cont

conditions of employment

employers associationswhat

bargaining process

political activities

korean economyfamily

korean iremployees

human resource policies