Changes In Employment Relations Due To Globalisation

Due to globalization the employment relations has affected all over the world. In the past few decades there are many economic policy changes all over the world. Globalization points to combining of countries within the world economy through increased transaction, investment, short term capital flows, and migration of skilled and unskilled workers internationally. This essay describes about changes of employment relations in both advanced and developing countries as a result of globalisation.

Globalisation is a process is not a condition or a fact. Globalisation involves two phases. The first phase is about cheap labour for labour intensive production. The second phase is puzzling involves high tech manufacturing and service. Due to global change the employee relations have undergone a sustainable change and the management of human resource have also changed. This paper starts by investigating employment relations in India followed by the employment relations in republic of Korea before and after globalisation. (Lansbury, et., al., 2004)

Now this paper describes about India. The population of India was 1.2 billion in 2008.India got its independence in 1947 before the independence the Indian industries was predominate by private owners they used an autocratic leadership style and the employment relations on those days was in an ad hoc manner. After independence the employment relations scenario was totally different because a large number of industrial enterprises was developed this resulted in industrialization. Due to growth in organisation the “one main dominance” was left behind, the functions of management are distinguished into different departments. Before globalization Indians made their decisions in management based on interpersonal considerations comparative to task demands. This is due to the reason the Indian management institutes have borrowed western education system. (Budhwar, 2003)

Indians were brought up in an environment where they value strong family relationship and they are dependent on others. Indian managers in the past are trained in the west and most of the management institutes in India have adopted western management system.

Now this essay discusses about trade unions and collective bargaining in India. In India the trade unions have come across four main phases, the four phases are the “early years (1850-1900), the growth years (1900-1947), the militancy phase (1947-1970) and decline phase (1980)”. (Budhwar, 2003) The trade unions were strong before 1980 after 1980 the trade unions began to weaken. The reasons for failure of unions are the workers to lose faith due to more strikes and they lost the confidence in military trade unionism. In India most of the trade unions in the past are controlled by outsiders like political parties and other persons who were not working in the industry. The collective bargaining in India has come across three periods from 1920 to 1950 and 1951 to 1969 and from 1970 till now. From 1920 to 1950 the collective bargaining was in the early stage and this method was not used for the regulatory labour conditions. In 1951 to 1969 collective bargaining was used to settlement of industrial quarrel. When comparing to the developed countries the economic condition in India was less due to this the union workers could not be in strike for a long time. (Budhwar, 2003)

Discussing about the employee relations in the state Indian government has proposed four policy’s over the past like maintain industrial peace and foster trade unions peace. To achieve the policy state has come up with many labour laws but the laws were not successfully implemented. Before the new economic policies the state government encouraged unions instead of cutting down the unions. Due to this reason there were many unions in India. Before globalisation the external trade was 0.44 in 1989 but after the relaxation of economic policies in 1991 the share trade id 0.8 in 2004. But when comparing the trade with china India has grown up less. (Budhwar, 2003)

Berore globalization the practise like recruitment, training, promotions and lay off are non generalize. A formal method of recruitment and selection was not followed before globalization. The recruitment was based on word of mouth approach. (Budhwar, 2003)

After the liberalisation of Indian economy the law has been proposes that all the new jobs should be advertised properly and process of recruitment should be formal. And also Indian government has created a human resource development ministry at the central government level and there is a large number of professional institutions provide training and development in hr related. The rules as been passed that the new employees should be taken initially as an apprentice this shows that there is a formal and structured approach in recruitment of people in India for organization. (Budhwar, 2003)

Globalisation is due to investment of multinational companies in developing countries. According to the World Bank forecast in 2020 India will become as a fourth largest economy in the orbit. After liberalisation of economic policies in 1991 the economy has increased positively. (Jayasuriya, 2008)Due to these developments more foreign firms in advanced countries shows interest of doing business in India. Indian domestic companies are under pressure due to liberalisation and there is an increased level of competition between the domestic firms and MNCs. (Budhwar, 2003)

Currently Indian managers are appointing themselves with the new techniques in management and the different phases of the management function which will be helpful in maintaining good employee relation. A research has been conducted in human resource of Indian organisation and they have given a feedback that without the development of human resource, Indian firms will not be qualified to takeover new technology and they cannot competitive with other abroad competitors. (Chishti, 2002)

In 1970 new approaches for collective bargaining was developed. From 1970 collective bargaining has moved from enterprise level to the plant level in the country. Due to globalization and increase in multinational companies in India the unions have lost their strengths and reforms. Due to change in economic conditions the unions join with the management now to take a cooperative approach in management decisions. Only two percent of workers in India are under collective bargaining agreements. The collective bargaining is going on shrinking in India. (Chishti, 2002)

After liberalised economic policies in India. Many global companies started their plants in India due to globalization the productivity got increased and the employees got higher pay and their basic pay was increased. And the working hours in India is reduced now people in India are working only 48 hours per week. The child labour is reduced in India now people who are above the age of 18 can only work in workplaces. Due to globalisation exploitation of women is more but they are still been paid low. Currently in India there are 150 acts of labour legislation but they are not fully achieved. (Budhwar, 2003)

Having discussed about India now this essay discusses about republic of Korea before globalisation and after globalisation.

The republic of Korea has a population of 48 million, almost 80 percent of the people are urbanised, and the urbanisation has increased from 30% in 1962 to 80%. The labour force was 22 million in the late 1990 and the participation rate is high and the unemployment rate was not above 2 percent. Korea gross national product has increased due to export oriented manufacturing. Korea is the member of organisation for economic cooperation and development in 1996. In 1997 Korea experienced a financial crisis so it got assistance from international monetary fund. (Bamber, et., al., 2000)

In 1945 the liberation was restructured and the left wing ( chun pyung) was banned in 1947 by American military government. The success of Korea industrialisation is due to cheap labour. In 1980 there was a protest by union activist and students against chum doo-hwan government this protest was the turning point of Korean employment relations the government changed is approach from authoritarian to conciliator approach. Before 1987 unionisation was less in Korea due to strong government, after 1987 Koreans unions have grown to be a powerful institution in labour relations. The working conditions of union members are improved by collective bargaining. The collective bargaining was the important tool for the improvement labours. (Bamber, et., al., 2000)

There are three levels of Korean unions and they are local unions, an enterprise, and a region. The employees in the work place will be joining in any one of the unions based on their job and Collective bargaining is decentralised in this level. The unionism of Korea has converted, the unions of car companies are affiliated to the Korean trade union congress but they were not officially recognised till 1997. The developments in 1993 are men have removed women in union activity and due to increase in work force of white collar workers, the white collar workers are increasingly unionised. (Lansbury, et., al., 2004)

Korean employers are engaged in different employers association. For example the business which is engaged in export or import there is a membership called Korean foreign trade association. So those who are doing export or import should be the member of this association. The chaebol differentiates Korea from other newly industrialised economy. The bank of Korea says that the top 30 chaebol contributes 95 percent of the total nations GDP and the top company which is contributing to the GDP is Hyundai (Bamber, et, al, 2002). The development of internal labour markets is due to agency of chaebol large scale economies for low cost competition. Chaebol was the reason for government growth strategy particularly due to blue collar workers. In Korea they were following one set approach “similar workers doing similar work in similar working conditions were concentrated by chaebol in one place or region”. By 1945 the government proposed a legislative structure for the Korean industrial relations. So chaebol cut off the action of unions they also sought their amenability as company unions. The Korean employment undergo fundamental changes after 1987, collective bargaining was decentralised with the drift of defending managerial command. (Lansbury, et., al., 2004)

The state plays the dominant role in economic growth in industrialization. By 1961 there was a rapid growth in economic role through export led, low cost competition. The state decided the hike strategy of chaebol by range over the business horizontally or vertically. By 1980 the labour laws was rewritten and the unions were alter, and the labour management council act was uttered these acts are passed with the intention making the unions power less and building the labour management linkage non-confrontational. From 1989 to 1993 the wages are increased in Korea for five years where as in 1987 the wages were not given by the government. The wages were given more easily by the public sector then the private sector. (Lansbury, et., al., 2004)

The trade union act standardised the collective bargaining in Korea. The members in the union can clear the matters regarding employee and organisation. Mostly collective bargaining takes place at the plant level and collective bargaining is the important factor for regulating industrial relations. The labour management council demanded a labour management council should be created and meet four times in twelve months with a company having 50 or more people working. (Lansbury, et., al., 2004)

In 1997 the national assembly of Korea passed an improved set of reformation to the labour legislation which postponed the relaxation of restriction on layoffs. To reduce the labour cost the employers started to employ contract labours. The contractors are responsible for the welfare of the workers. The unions protest against the legislation of dispatch workers but the employers justify that it should be legalised. (Lansbury, et., al., 2004)

Due to industrialization there is a decrease in agriculture and unemployment. The agriculture in Korea is reducing by 6% percent every year. Even though there is a massive decline in agriculture the education level is increasing in Korea. The largest business group in Korea hired employees through mass examination but before the economies were developed the workers are hired on the basis of relatives of the employees. (Lansbury, et., al., 2004)

There are many migrants in Korea especially from the Asian countries. The migrants are working mostly in the labour intensive work place where the work for labour is more. Due to the crisis of unemployment the working hours in Korea is been reduced, by reducing the working hours more people are employed and benefited. They Korea respond to the critics by adopting new human resource strategies and senior based reward system, increased use of contingent workers and frequent use of lay off. (Lansbury, et., al., 2004)

Globalisation is the major factor for the changes around the world, due to changes around the world there are some changes on the employment relations as well. In nutshell this paper as explained about changes in the employment relations in the developed countries as well as the developing countries and it has described about the changes that have gone through in the period of globalisation.