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.
 WORK AND LIFE

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.

DEFINITION OF WORK

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.

ASSUMPTIONS ABOUT WORK AND WORKERS

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 BELIEFS
- Work ethic
- Organisational belief system
- Marxist-related beliefs
- Humanistic belief system
- Leisure ethic.
 EMPLOYMENT AND LABOUR MARKETS

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

TRENDS IN WORK AND EMPLOYMENT

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.
 THREE SCENARIOS

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.
 THE CHANGING WORKFORCE

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 higher-
wage 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.
 DEMOGRAPHIC TRENDS IN NEW ZEALAND
 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

THE NEW WORKER

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
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.

LABOUR MARKETS
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.
 LABOUR MARKET AND ORGANISATIONAL SIZE

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.

IMPACT OF MANAGEMENT
- 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.
 LABOUR MARKET FLEXIBILITY

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.