Human resources management and regulations, and conflicts between Malaysian workers and a foreign company directors/managers

Human resources  management and regulations.

Human resource is being regulated by various laws in the country which is amended accordingly from time to time to suit the current needs of the country and society.  The new employment relationship gives the human resource staff the opportunity to become more active in corporate strategy by quantifying the impact of training programs on the bottom line.  That is where the integration of human resources is critical to the business partnership.   Another evolving role will be more familiar. Throughout the downsizing era, human resource professionals saw their role shift from  that of employee advocate to helping management cut staff. Now it is time to shift the focus back.   Good human resource people have to focus on how to balance being a strategic partner with being an employee advocate.

HR Management

The efficient management of human resources is critical to achieving excellence. Therefore, in today’s working world, efforts will continue to be taken to increase the number of skilled and knowledgeable workers who are technology-oriented, particularly in information technology.  Measures to strengthen the quality of the workforce through training and upgrading of skills will also be undertaken. The private sector had been urged to support and complement the public sector initiatives. In this regard, the establishment of new institutions of higher learning by the private sector is encouraged. The government had stressed to private sector management in particular, the need for a shift in paradigm towards better investment in people and the management of knowledge workers to attain greater competitiveness in the global market in the near future.

People and Performance

Human resources management is not restricted to hiring and firing, and preparation of payroll only.  As times goes on the HR function expanded to the to cover selection, training and promotion.  Another difficult task to be performed by HR is to protect the firm in its interaction with unions.

Today, HR plays more important role in the firm as strategic partner and agent for change.  In today’s high-performing organization in the competitive market, HR play an important role to deliver highly trained and committed employees which will be the firm’s competitive key.  Manager and supervisor in today’s market do accept the fact that the employee is the main asset of the company.  Thereby through HR involvement in strategy is necessary to ensure that human resource support the organization’s mission.

HR and Employee Commitment

HR give impact to employee’s performance by providing motivational methodology towards achieving committed employee through teamwork and ensuring two-way communication to foster commitment.   HR need to be committed to ensure employees that fair treatment of  all employee’s grievances and disciplinary concerns.

Two way communications foster commitment,  firms like Federal Express and Toyota in US have installed HR programs that guarantee two-way communications and fair treatment of all employees grievances and disciplinary concerns.  High commitment firms also tend to engage in employee development practices, which aim to ensure that employees can use all their skills and gifts at work. 

Employee behavior is especially important in the performance of  service firms like banks.  If a customer is confronted by a sales person who is tactless, unprepared or give-up to discuss the pros and cons of the different products, or even worst downright discourteous due to low morale, all the banks other efforts will have been wasted.  Banks is service firm which has little to sell but their good service.  That makes them very dependent on the employees’ attitudes and motivation – and the senior management.

HR and Performance

Similar to other departments, human resource managers must be able to use data and other resources available in their unit within their constraints to forecast outcomes and become real partners with higher management.  In essence, HR departments must be able to show how they add value to the company.  It must be noted and recognized that the job of human resource professionals is continuously evolving along with any other job and trends that are emerging.  So much so that human resource will have to be proactive within their constraint to contribute towards the bottom line of the organization.  HR will not only measure others performance but to include themselves in the assessment.  Then only that they can contribute towards a package to pay employees based on performance.  

Retaining Employees

Salary is not everything to make employees stay, even though salary can be one of the criteria.  HR management must accept the facts that other organizations can also offer attractive salaries including fringe benefits.  Managers have to compensate employees beyond salary increases.

The efficient management of human resources is critical to achieving excellence. Therefore, in today’s working world efforts will continue to be taken to increase the number of skilled and knowledgeable workers who are technology-oriented, particularly in information technology.  Measures to strengthen the quality of the workforce through training and upgrading of skills will also be undertaken. The private sector had been urged to support and complement the public sector initiatives. In this regard, the establishment of new institutions of higher learning by the private sector is encouraged. The government had  stressed to private sector management in particular, the need for a shift in paradigm towards better investment in people and the management of knowledge workers to attain greater competitiveness in the global market in the near future.

Emphasize career development

Employees have to be encouraged to consider improving their education and offer tuition reimbursement if their selected course of study can benefit the organization in the long run.  Be sure to set up a system that ensures employees will not leave once they obtained their degrees.  Provide opportunities for employees to attend seminars that will improve their skills.  Hold in-house seminars if cost permits.  To foster career guidance, set up a mentorship program in your company that pairs high level executives with young professionals. Of course all the above should be organized within the constraints and resources available.

Legal trends affecting HR management

Due to uncertain new happenings in the labor industry, many new laws continue to be passed  which effectively limit managers’ actions.  The equal employment opportunity laws bar discrimination on the basis of race, age, disability, religion, sex or national origin.  HR management need to give assistance to other managers on the various legal constraints such as mandated health benefits, occupational safety and health requirement and union-management relation’s laws.

Defining Human Resource Accounting

Human resource accounting (HRA) as an approach was originally defined as the process of identifying, measuring and communicating information about human resources in order to facilitate effective management within an organization. It is an extension of the accounting principles of matching costs and revenues and of organizing data to communicate relevant information in financial terms.

The accounting of human resources can be seen as just as much a question of philosophy as of technique. This is one of the reasons behind the variety of approaches and is further underlined by the broad range of purposes for which accounting human resources can be used, e.g. as an information tool for internal and/or external use (employees, customers, investors, etc.), and as a decision-making tool for human resource management (investments in human resources as well as personnel management in general).

The Challenge to Human Resource

Until recently, the "value" of an enterprise as measured within traditional balance sheets, e.g. buildings, production plant, etc., was viewed as a sufficient reflection of the enterprise's assets.

However, with the growing emergence of the knowledge economy, this traditional valuation has been called into question due to the recognition that human capital is an increasingly important part of an enterprise's total value. This has led to two important questions:   how to assess the value of human capital in addition to an enterprise's tangible assets and  how to improve the development of human capital in enterprises. The emergence of methods for accounting human resources aimed at measuring, developing and managing the human capital in an enterprise, can thus be said to reflect the need for improving measuring and accounting practices as well as human resource management.

 

 

Conflicts Between Malaysian Workers and Foreign Managers

Conflicts between Malaysian workers and a foreign company manager were due to certain differences as follows:

·         Working hours

·         Religion : Friday prayers, Fasting month, Festivals

·         Educational Background

·         Culture, Attitudes & Values

·         Different Expectations

·         Treatment of foreign workers in Malaysia

·         Visions - High concern for productivity, low concern for people

Religious Factor

Foreign company manager will sure be aware of Malaysian regulations which pertains to employee and employer relationships, may not in detail but in general.  Besides the written laws, there are expected implied laws which are approved by employers from local companies such as matters relating to the various religious believe in Malaysia.  For example as a Muslim male shall require more than one hour lunch break on every Friday to perform Friday’s prayers.  During the fasting month all Muslim staff would be happy if their employer allow them to work through the lunch hour and release them an hour earlier end of the day.   Likewise the Chinese staff will need an off-day for the Chinese New Year eve, otherwise they will be required to be in their house for an early family dinner by 5.00 p.m., therefore the superior will need to give time off for them be back home early.

For a production company, foreign company manager may require the factory to close down for long break for the workers and maintenance of the machine during the Christmas and New Year eve, however the Malaysian workers wish to have a long break during the local festival such as Malay Hari Raya or the Chinese New Year.  The foreign company manager may want to have the break to go back to his country, however likewise the local wish to celebrate long holidays during local festive at their provinces or villages.

Another problem faced by the foreign company manager during the relationship with the Malaysian workers is the difference in culture, behavior and work habits.  Most Malaysian workers are backed by local culture of soft spoken and not direct in pointing out certain errors of subordinates and not at all to point out mistakes of superiors.  Whereas the foreign managers from the developed nations like United State and United Kingdom are used to be direct on pointing out critiques. Even there are corporate culture in many organization that practice openness where the subordinates may also remind their bosses.

 

 

 

 

Protection from change

As information becomes the most valuable commodity in society, organizations are changing faster and more frequently than the employees who work for them. Indeed, there often is a perception that employers change for the sole purpose of changing.  In many organizations, employees believe that change takes place without regard to its effect on professional goals or personal lives. Compounding the problem, the change may be part of a program of total quality management that has lofty goals but, in effect, conveys the message that employees can never do enough.

A number of things can be done to minimize the adverse effects of change, involving employees in the change process can be helpful. Also helpful is giving employees advance notice of changes so they have time to adjust, explaining the reasons for changes, and timing changes so that employees are not disproportionately affected.

Unions

One strong reason or excuse employees find unions attractive is the sense that the employer cannot be relied on to keep promises. Broken promises not only fuel the desire for unionization; they also make the union's election campaign easier. A foreign employer that cannot keep a promise should explain why. One way to ensure  that broken promises do not fester is through formal employee attitude surveys.

Many major companies were shifting priorities, employees needed to know what new skills would be needed, and business would have to clearly define those requirements and anticipate business would have to clearly define those requirements and anticipate the big trends quickly.  Companies should bring together a group of companies to discuss common interests in which they did not compete.  They need to come up with new models for shared success. That idea developed over time into the Talent Alliance, a private, not-for-profit coalition established in Morristown, N.J., by several companies including AT&T, DuPont, Johnson & Johnson, Unisys, NCR Corp. and TRW.

Employees as commodities

There are times that foreign companies in Malaysia, due to some internal reasons of theirs or due to tax incentive purposes, move their operations to other countries and thereby downsize their current operations while a newly form entity will be incorporated  with new products and services or additional products and services.   When this occurs these companies which are normally highly equipped with better technologies then the local companies will have  an online database to :

1.      Match applicants from downsizing companies with available jobs at other member companies.

2.      Have  “lease link” system that allows member companies to lease needed  employees with special expertise from others in the alliance.

3.      Prepare program  for  career  growth center that offers counseling, networking, interviewing and negotiating.

4.      Have a research forum for job trends and workplace issues.

5.      Training and education will be conducted within their alliance. The training and education will focus on skills for interpersonal leadership and networking. It will include video conference seminars to reach employees around the country and training programs on CD-ROM.

Companies have focused on downsizing and jobs that are going away and the real issue is not to focus on jobs that are obsolete. We need to make people employable for life. That’s one reason skills are at the center of the alliance’s mission.

This good and beneficial idea of the foreign managers are not well informed to the local employees and as such their perception is that they are being traded as commodities and their thinking being brought back to the slavery and colonial days.  Foreign employers should inform their employees of their intention once they finalize the issue of downsize or shifting their operations.  Employers should explain their long term goals or plans to the employees stressing the benefits expected to be enjoyed over the restructure process despite the minor disruption over a short term period.  Explanation should be done through the formal channel and also the informal ways.  If situation permits representative form the employee to be invited in the discussion on the relevant subject matter.

Give and Take

Companies throughout the country are examining employees’ need for lifetime employability and continuous development of skills. After years of downsizing, rightsizing, reengineering and restructuring, employers and employees are coming to terms with each other in new and complex ways, leading to what some call the new employment pact.

The expectation of lifetime employment at one company is mostly a thing of the past, and the evolving agreement—which no one has clearly defined yet—is based on the company’s financial and market success.  Typically, employers who want more productivity, innovation and commitment are finding they must do more than tell employees they will have a job as long as they help the company make money—or until the business changes.

Wary employees are willing to give more, but in return they want career security. That means training to improve their skills for the next job; performance-based compensation including bonus plans, incentives and stock options to give them a stake in the company’s success; and portable benefit and retirement plans.  Along the way, companies will also address increased job flexibility, telecommuting and family-care issues.  UNUM Corp., a Portland, Maine, firm that sells disability insurance, provides career counseling and training for employees, as well as stock options that are redeemable if the company meets its goals.

A focus on continuous learning

Companies are changing and people have to know what skills will be required. That means human resource departments need to set new standards for collaboration and continuous learning.   While all companies need to provide more employee training and career development under the new terms of employment, continuous learning and increased skills are vital in the fast-changing high technology industry. Employers need to keep skill levels up to meet changing customer needs, therefore  employee development is an integral part of company policy.  Many companies embarked on quite an intense look at this.

In addition to enhanced compensation,  top performers are to receive added educational and networking opportunities, such as a week at the Foreign School of Business for leadership programs. Nestle’s in Malaysia increased sales force was accompanied by a shift in the way its employees are compensated. The human resource staff serves as the lead team in setting pay-related goals.  They have evolved into much more of a performance-for-reward company.  There are measurable goals people have to accomplish in order to get paid incentives.

                        

Human resource personnel will have to work closely with the management team to meet strategic needs and to understand what business the company is in, what kind of skills are needed, and what the employee population needs to ensure success in the business.  Employees have a keen interest in training and keeping themselves marketable and without career development opportunities, employer would not be able to retain employees, obviously.

There is no guarantee by the employer to the employee and vice versa on what will be the future, usually, employees do not have the opportunity to get their skills up.  When the company posts a job, the job is there now, which is good for people with those skills. The career trends give them a vision for what’s hot in the future, so they can set a course of development, plan and get the skills necessary for the jobs of the future, with the present employer or a new employer.  There are things that an employer can provide that distinguish it from everyone else in the marketplace and make it a place employee want to work and they had to be the employers’ of choice.

The company provides the training, but employees “own” their career development,  if they want to work and progress, they’ve got to keep their skills current and updated, understand the business the company is in, the requirement and how the company makes money.

                    

 

 

Forging a business partnership

One major concern under the new employment pact is finding a way to focus employees on the financial success of the company and explain that jobs and salary increases are subject to that success, without creating an adversarial relationship. The challenge for HR is finding a way to meet the needs of both employers and employees and develop a business partnership.   Articulating the terms of the deal is the place to start, since companies must acknowledge that they are offering employees different deals, and that there is no one employment relationship, even in the same company, the relationship turns on which employees are contributing directly to a company’s financial success—who is really core, or who are the people who deliver the most value to the customer.   While all employees may be valuable, at some point management has to tell employees who is “core” and who is not.  But as companies merge and change product lines, what is core today may be peripheral tomorrow.

Employees and managers have shifted roles to accommodate the changing workplace.  Companies that progress very well will sure to increase their workforce may be five or ten fold.  As the number of employees per manager increased, managers became responsible for establishing overall department goals and the context in which employees do their jobs. The employees, who are closer to the daily needs, are responsible for developing the work initiatives and reviewing them with management.

Many HR consultants said that the onus is on the employee.  It’s a shift of responsibility from the manager to the employee to take ownership for the job, learning and progress the career.

In today modern world,  human resource department has also shifted its emphasis, focusing more on business strategy, partnering and training.  The training budget increased to keep up with all the people.  The company relies on shared services whenever possible and is in the process of outsourcing as much as possible of its administrative transactions.  That’s not a money maker and other people can do those things better and less expensively.  Therefore part of the training program are being outsourced eventhough the company relies on management staff for core competency as well as identifying and training employees to meet the future needs of the company.

 

 

Paying for performance

The trend toward pay for performance is another hallmark of the new employment agreement, and cash incentive and stock option plans are especially useful in keeping company stars. Employees who are skilled and able to generate ideas will do well.  They will be more like free agents, and will stay as long as they benefit.

 

Stock Options

 High technology and big companies frequently rely on stock options to attract quality employees and to connect the employee’s work future to the company.  Stock options have turned more employees into millionaires,  debt free, reduce housing loan outstanding and many were able to go for overseas vacations.  The company stock were being given to employees based on their ranks.  Therefore most employees will struggle to compete to get promoted in order to benefit on the employee share option scheme.

Loosing Stake

This is one of the trend of employers retaining employees, however some foreign own companies refuse to float their shares as they might have to let go may be about 40% of their holdings eventhough they still have the controlling stake.  This issue too became a conflict issue between local employees and the foreign management of the company.  Employees envied neighboring company staff who had the opportunity for extra income which there are times is more than their yearly bonus from the employees share option scheme when their company is listed at the stock exchange.

  

There are employees who have been with the company for a long time have done very well. Keeping the stars requires a creative mix of substantial stock options and non monetary benefits such as allowing telecommuting and flexible hours.  Awards and incentives are given to top performers in the company.  These reward may not direct monetary benefits as bonuses attracted income tax, whereas profit form stock options are tax free.

 

High Concern for Production

All managers are concern for  production.  Most employees are also concern for production especially when their performance are correlated to productivity.  However local employees are not happy with the foreign managers who have low concern for people.  The employees expect the management standard to be high concern for production and at the same time maintain a standard of high concern for people too.  There are various matters for the foreign manager to take note of in order to have high standard of concern for people.  Some locals consider that pay is not everything.   

Guiding Principles

A conflict should be resolved skillfully. A conflict, when happened may bring about benefits to the company as it may bring about changes. As such when a conflict is taken in a very positive way it can be a blessings. Conflicts when solved, means:-

• Gain cooperation from team members
• Improve performance and productivity
• Reduce stress and preserve integrity
• Solve problems as quickly as possible
• Improve relationships and teamwork
• Enhance creativity
• Increase staff morale

Resolving Conflict Situations

To manage conflict effectively a superior must be a skilled communicator. That includes creating an open communication environment in his unit by encouraging employees to talk about work issues. Listening to employee concerns will foster an open environment. The superior must make sure that he really understand what employees are saying by asking questions and focusing on their perception of the problem.

Whether there two employees who are fighting for the desk next to the window or one employee who wants the heat on and another who doesn't, an immediate response to conflict situations is essential. Notwithstanding the conflicts between fellow employees, there are also managers who are in direct conflict with employees. Good managers though have no prejudice. Good managers usually have some basic guidelines in solving conflicts whether it’s a conflict between employees or a conflict between the manager and an employee.

Foreign managers should see certain things positively for the benefit of the organization even to the extend to sacrifice certain home rules in order to accommodate local workers as long as no compromise on job function which direct or indirectly effect productivity.

Whatever conflict that may arise, HR management must attend to the issue.  Immediate response to conflict situations is essential.  Some ways to resolve conflicts are as follows:

• Acknowledging the existence of a difficult situation.  Honesty and clear communication play an important role in the resolution process.  Acquaint yourself with what's happening and be open about the problem.
• Individuals should be allowed to express their feelings.  Some feelings of anger and/or hurt usually accompany conflict situations.  Before any kind of problem-solving can take place, these emotions should be expressed and acknowledged.
• A clear definition of the problem must be established.  What is the stated problem?  What is the negative impact on the work or relationships?  Are differing personality styles part of the problem?  Meet with employees separately at first and discuss about the situation.
• Determine underlying need.  The goal of conflict resolution is not to decide who is right or wrong; the goal is to reach a solution that everyone can live with and the functions in the organization keep going.   Looking first for needs, rather than solutions, is a powerful tool for generating win/win options.  To discover needs, you must try to find out why people want the solutions they initially proposed.  Once you understand the advantages their solutions have for them, you have discovered their needs.

• Find common areas of agreement, no matter how small:

·         Agree on the problem

·         Agree on the procedure to follow

·         Agree on worst fears

·         Agree on some small change to give an experience of success

• Find solutions to satisfy needs:

·         Problem-solve by generating multiple alternatives

·         Determine which actions will be taken

·         Make sure involved parties buy into actions. (Total silence may be a sign of passive resistance.) Be sure you get real agreement from everyone.

• Determine follow-up you will take to monitor actions.  You may want to schedule a follow-up meeting in about two weeks to determine how the parties are doing.
• Determine what you'll do if the conflict goes unresolved.  If the conflict is causing a disruption in the department and it remains unresolved, you may need to explore other avenues.  An outside facilitator  may be able to offer other insights on solving the problem. In some cases the conflict becomes a performance issue, and may become a topic for coaching sessions, performance appraisals, or disciplinary action.

Dealing With Anger

When you meet with someone who is angry, especially on issues that are sensitive to race, culture or country,  you may need to use the tools of effective listening to help defuse this anger.   Nevertheless, when anger is directed to a person, it is much more difficult to respond definitively, because that particular person’s own emotions are usually involved.

To effectively defuse anger, keep in mind the needs of the angry speaker:

• To vent.  An angry person needs to let off steam and release the anger that may have been brewing for a long time. The manager who is suppose to be better qualified and more experience may need to use his experience communication skills to allow the subordinate to let off whatever is his mind.
• To get the listener's attention.  An angry person wants to know that the opponent is paying attention, so use your body language to show this.
• To be heard.  An angry person wants someone to listen to his point of view.   Acknowledge the feelings you hear so that the speaker knows you appreciate how angry she is.
• To be understood.  An angry person wants someone to appreciate how he feels.  Try to empathize with her experience so that he feels you understand the situation, and acknowledge her right to feel the way he does.

When you're listening to an angry person:

• Be attentive and patient.  Keep in mind that he will become less angry as we let him express himself.
• Be sincere.  Empathy and validation must be both honest and genuine.
• Be calm.  Try to remove your own emotions from the discussion.  Remember that an angry person may say inflammatory things in the heat of the moment, but we do not have to react angrily.

Summary

In most conflicts, neither party is right or wrong; instead, different perceptions collide to create disagreement. Conflict is natural and it's up to you to respond to conflict situations quickly and professionally. Conflict can be very positive; if you deal with it openly, you can strengthen your work unit by correcting problems. Conflicting views give you a chance to learn more about yourself, explore views of others, and develop productive relationships. Clear and open communication is the cornerstone of successful conflict resolution for progress of the company.  Open conflicts may be better than silent protest which will not benefit the organization.