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Human Resources

Lecture 2 Work and workers Employment and labour markets
Lesson Plan: Students should be able to trace the development of modern HR management from the earliest days of the Industrial Revolution; identify the historical and organisational antecedents of personnel management and human resources management; Describe the development of personnel management and HR management in New Zealand.

The nature of work is changing, we are entering a new revolution. It’s too easy to say that we all look at work differently. But each of us inevitably brings our own perceptions, expectation, values, and motivations to the subject of work. Our different approaches to work are influenced by many things, including the nature of the job, the quality of management, the rewards we gain from work, the organisation’s culture, its mission and ownership. The work that people do reveals much about them and their society. Work is a central activity in the lives of most people. It is a major mechanism for positioning people in society and for allocating social status and power. Jobs largely determine how and where we live, who our friends are, the kinds of education out children receive, and how we define our relationships to one another.

Work is any activity which is directed towards the production of goods and services which typically have a value in exchange, and which is carried out for a valuable consideration.

People who have traditionally seen’work’ in terms of their own paid employment are treating unpaid work as a source of personal satisfaction and development.

Rational-economic. It says that people are motivated by economic needs. People are irrational that is why they need to be controlled. Those ones who have self-control and self-motivation must take responsibility for managing others. Social. People are social animals and gain their sense of identity from relationships with others. Management must be able to mobilise and rely on social relationships, and so issues of leadership style and group behaviour are important. Self-actualisation. People are primary self-motivated and self-controlled. External controls and pressues are likely to be seen as reducing autonomy and thus affect motivation. Given the chance, people will voluntary integrate their goals with those of the organisation. Complex. People vary, with many motives whose relative importance changes from time to time and situation to situation. Psychological. People are complex, unfolding, maturing organisms who pass through psychological and physiological stages of development. Work is a part of a person’s identity and ego ideal, and motivation depends on having opportunities to work towards that ego ideal.

There is a belief that our orientations to work are largely formed outside the workplace, influenced by family, community and social class. Another belief is that people’s desires and expectations are formed by many influences – including past experiences of work and life, current work and home situations, personality, skills and abilities. Employee attitudes are one outcome of work orientations. When economic conditions are good, people tend to choose their workplace according to their orientations – leading to largely self-selected workplaces with shared expectations. And they feel controlled when adverse labour market conditions reduce their choices. Schein categorizes the arrangement of people’s orientation to work in three main groups: Instrumental or economic orientation – concerned with money, material goods and security; Relational or social orientation – concerned with relationships, friendship and other people. Personal or psychological orientation – concerned with job interest, job satisfaction and personal growth.


Work ethic Organisational belief system Marxist-related beliefs Humanistic belief system Leisure ethic.

19th century North American slave fairs. Fairs in Britain where workers seeking employment would stand alongside a symbol of their trade and wait for farmers to come by and discuss terms of engagement. Currently: posting CVs, searching for jobs on line, using the services of agencies. The labour market can considered like a market for any product which is balanced by supply and demand. What are labour markets? – They can be defined as a geographical or occupational area in which factors of supply and demand interact. Labour markets are: Geographical Job market (the area in which people move as they follow their employment career). Wage market. The area in which a particular wage or level of remuneration is paid for a particular kind of work.

WORK ETHIC Work is good in itself and offers dignity. Everyone should work. People who do not work are not useful members of society. ORGANISATIONAL BELIEF SYSTEM Work takes on meaning only as it affects the group or organisation and contributes to a person’s status and rise in the organisational hierarchy. MARXIST-RELATED BELIEFS Work is fundamental to human fulfillment. Through work, people crate themselves and their world, and keep in touch with others. Workers should have more say about what goes on in organisations and should exercise more control over the workplace. HUMANISTIC BELIEF SYSTEM Individual growth and development in the job are more important than the output of the work process. What happens to people in the workplace is more important than productivity. LEISURE ETHIC Work has no meaning in itself, but finds meaning in leisure. Human fulfillment is to be found in leisure activities where one has choice about the use of time and can pursue personal and enjoyable interests.

Ancient times Greeks’ attitudes Hebrew belief system Protestants thought that serving to God should be done through work. Modern era

Contemporary trends in work and employment are driven by various influences, including globalisation, competitive pressures, ‘new right’, economic and political ideologies, information and communication technologies, the biological and genetic revolutions, demographic changes, and the increased participation of women in the workplace. RISING UNEMPLOYMENT Unemployment and under-employment have been growing steadily, at least in developed countries, since the end of the Second World War. There are both macro and micro-economic causes. - Demography; - Employment quality (many jobs are casual or contingent); - Aging people have difficulties to find new jobs or retaining current ones.

GROWTH IN NON-STANDARD EMPLOYMENT There is a steady increase in non-standard employment – which includes part-time work, short-term or casual employment, contracting, self-employment and temporary or agency work. Non-standard employment offers flexibility to both employers and employees and reduction of labour costs for employers. CHANGES IN SKILLS AND SECTORS Industry and organisational changes have produced a matrix of shifts – from the productive sector to service-based industries, from ‘blue-collar’ to ‘white-collar’ occupations, and from unskilled and semi-skilled roles to technical, professional and managerial positions. These shifts bring an obviious need for different and higher skills. STATIC EARNINGS AND A GROWING GAP There is a growing gap in earning income between people are able to move with the times and those who are unable to respond, as well as most people in non-standard forms of employment.



THE PESSIMISTIC LOOK New technologies can now displace ‘mental’ as well as ‘manual’ work Mechanization and automation have historically driven people off farms and out of factories, but there has always been an emerging sector which absorbed displaced workers; but that is not the case now. Globalisation extends the power of capital beyond the reach of any balancing social forces, including government regulation and collective bargaining which, in any case, only operate at the national level. THE OPTIMISTIC VIEW Technological progress will encourage greater social and economic opportunity, freedom and growth. Technology should not be feared because it displaces labour, but welcomed as a tool for developing new products and services and new ways for us to work and live. Globalisation does not just benefit capital at the expense of labour: it is an extension of the marketplace and thus brings expanded opportunity. BUSINESS AS USUAL? Some people appear to be neither pessimistic nor optimistic.

Demographic trends. Ageing, ethnically and racially diverse, with a higher proportion of recent immigrants, more inclined to marry later or not at all, and ore likely to delay child-bearing. Workforce trends. Older, more female and more multi-cultural, better-educated and more transient and flexible. Economic trends. Globalisation, technological innovation and other trends will force organisations to continue the search for cost reductions and improved efficiency. As a result, at least in the higherwage developed counties, overall employment levels will probably continue to decline. Work/ life trends. Issues of work and family will become increasingly important for organisations and their HR planning and staffing strategies. Child-care assistance will continue to be an important concern, but elder-care needs will become prominent as well. Dual-career couples, home-based working, flexible hours and project-based work will be features of the ‘family-friendly’ response to these work/ life trends.

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The population growth rate is slowing The population is ageing (therefore the workforce is ageing) The workforce is more female The workforce is more ethnically diverse A more educated workforce



Economic and social changes, and the demographic trends that accompany them, will determine the future composition and nature of the workplace. Workers of the future should have good education; People’s life styles and life circumstances are changing. People want to work to live not live to work. People will work less; Females work more but they might have children, so their work will be constructed around them and their responsibilities.

Knowledge workers rely on knowledge rather than skills to perform their jobs. Scientists, engineers, public relations executives, bankers, lawyers, real estate developers, consultants, strategic planners, systems analysts, architects, cinematographers, publishers, writers, musicians and university professors. (characteristics) - They rarely come into direct contact with the ultimate beneficiaries of their work. - They often have partners or associates rather than bosses or supervisors. - Their income may vary from time to time, and are not directly related to how much time they put in or work they put out, but rather to the quality and originality with which they identify, solve or broker new problems. - Their careers are not linear or hierarchical. - They often work alone or in small teams. - They spend long hours at computers, in meetings and on the telephone, and in places and hotels – advising, making presentations, giving briefings, doing deals. - They usually have post-graduate degrees.

MANAGING THE KNOWLEDGE WORKER These people are: Less responsive to formal authority, more responsive to the authority of knowledge and skill; More concerned about self and total life style than about specific career issues; Likely to be involved id dual career situation and, therefore, less mobile geographically. More motivated by project and job challenge than by organisation, Less loyal to organisaion. More motivated by continuous growth and learning.

Market puts buyers and sellers in touch with one another. In this respect, labour markets are no different from markets for goods and services – although, for various reasons, labour markets may be less effective and efficient. Development of labour markets: Slave markets; Labour fairs; Current ways for searching for work.

There is DEMAND and SUPPLY for and of workforce on the market and the condition of the labour market defines the requirements for specific occupations. THREE TYPES OF LABOUR MARKET Geographical labour market (where the work is situated and how far is it to get to it?) Job market (the area in which people move as they follow their employment career). Wage market (the area in which a particular wage or level of remuneration is paid for a particular kind of work). What are some characteristics of New Zealand market in terms of geography, job and wage? What about market in China? WORKERS COMPETITION It makes people search for job differently, be a better employee (commitment), constantly educate yourself in order to stay competitive, etc. What would you do to stay competitive? STRUCTURE IN LABOUR MARKETS Consistency in recruitment, selection, remuneration and other employment activities state that these practices Are established by law, by negotiation and contract, by custom, and by organisational policies or management decision Establish the rights and privileges of employees Introduce certainty and consistency to the management of people in the organisation, and Have the effect of limiting managerial discretion.


Large organisations are more likely to pay close attention to the detailed requirements of legislation, and more likely to attract the interest of union officials and government inspectors if they do not. The general state of employer-employee relations is often affected by organisational size. Smaller organisations boast ‘a family atmosphere’ and ‘a personal approach’, while larger organisations usually have more formalised procedures. The bigger the company the less chance that the top management knows every employee in person. This role is given to managers now. So…

Size is significant for the nature of personal relationships in the organisation and for the formality of the employer-employee relationship.

Constraints on managerial freedom The traditional bureaucratic model has ‘administration’ rather than ‘management’ as its central feature and it prescribes detailed rules for the behaviour and employment of public servants. It relies heavily of rules. Moreover, the shift towards performance seems more as a mechanism for control than an encouragement for flexibility and entrepreneurism.


Government have frequently seen public-sector employment, which they can control directly, as a testing ground for new labour market policies. E.g. equal pay was introduced by legislation to NZ’s government sector more than a decade before the Equal Pay Act 1972 was enacted to cover other employers.


There is still a tendency to look overseas for models and to transplant them directly into the new environment. The importance of systematic approaches to all aspects of HR management has been increasingly recognised in the past three or four decades, leading to greater professionalism through networking contacts and organisations like the Human Resources Institute of New Zealand. Added structure in labour markets Labour markets operate no more perfectly than other markets, and their behaviour cannot be explained simply in terms of supplky and demand. Labour market participants – employers, workers, governments – do not always behave rationally, , i.e. in accordance with theoretical models. E.g. an individual may stay in a job for reasons of sentiment, familiarity, convenience or inertia – even though a higher paying job is available with a competitor employer. This means that we must identify the causes of ‘added structure’ in labour markets.

Attempts to manipulate labour markets to aid economic growth are a constant theme in liberal market economics. Eg. Swedish labour system of flexibility and mobility, now it is out-dated. The importance of flexible labour markets. For human resources to be used most efficiently, it is important that labour markets be as flexible as possible. Where there is a high degree of freedom to contract between employer and employee, skill acquisition will be encouraged, virtually all workers genuinely seeking jobs will soon find them, abour will tend to flow to those areas of the economy where it is most needed, and there will be strong incentives for employers and employees to strike deals that maximise productivity.

Labour flexibility There is no single model of labour flexibility. Each employer’s approach depends on factors, like organisation's size and type of industry, location and state of economic activity, and the social, economic and employee relations environments. Functional and skills flexibility – employees’ job assignments are changed according to needs and circumstances. Employees must be willing to adopt new work practices and to move freely between different work tasks. Numerical flexibility – employers adjust employee numbers to meet changing demands and economic conditions. Flexible work patterns – employees numbers are not changed, but their working hours are adjusted to meet the organisation’s production or service needs. Wage flexibility – the employer’s ability to adjust wages, and thus labour costs, is subject to both legislative and negotiated constraints in New Zealand, and in most other countries. Externalisation – part of an organisation’s work is carried out by enterprises or individuals outside the organisation. The work maybe outsourced or performed on-site by contractors. Geographical mobility – the ability of workers to move freely between different regions, and even different countries, may be less relevant to labour flexibility in an isolated country like New Zealand that it is in EU.

Types of unemployment
Cyclical unemployment – which increases when there is economic recession and falls in times of prosperity, but has recently shown signs of becoming ‘uncoupled’ from the cycles of economic activity. Seasonal unemployment – which occurs, for example, when fruit pickers are laid off at the end of the harvest, or building and construction activity is lower during winter. Frictional unemployment – which counts people who are ‘between jobs’ and thus reflects the fact that people are constantly changing jobs, employers and locations. Structural unemployment – which is influenced by general economic activity, but results more directly from a reduced demand for particular labour and skills as a result of new technological and processes, and changes in customer’s needs and preferences. Labour force participation The size of the labour force is determined by the number of people of working age, who are available for work and wanting employment. Implications for HR management (in times of improving communication)

Improved employee communications New training needs Legal questions Ethical dilemmas Fear of change.