Discuss about the Labor Management for Employee Participation.
This study is based on the subject area of Labor Management. The primary focus is made on the labor management relations in respect to Singapore. The study analyzes mainly two areas – the roles played by the key players of Singapore labor management relations and the competitive advantages that have been gained by Singapore through labor management relations. The labor management relations refer to the trade unionism, industrial disputes, employee participation, collective bargaining, grievance handling and discipline management and labor laws interpretation. In the words of Lim (2015), the labor relations are the rules and regulations that are used to organize and govern the employment.
In Singapore, the labor management relations are established by the collaboration among Government of Singapore, Industrial and Employment Relations Department and International Labor Standards Department (Katz, Kochan & Colvin, 2015). The collaboration among these three departments is known as Tripartism. The formation of labor management relations in Singapore was started in 1950s; however, at that time, the industrial relations or labor management relations in Singapore was much aggressive. The primary challenge that the Singapore Trade Union Congress or STUC faced in the initial stage was weak economic situation and the scarcity of resources to attract and retain the foreign investment (Brage.bibsys.no, 2016).
In the beginning of 1960s, the labor management relation in Singapore was still weak. However, after 1965, the National Trades Union Congress or NTUC in Singapore helped the government of the country to improve the traditional labor management relations (Tripartism.sg, 2016). In 1970s the formation of National Wages Council (NWC) boosted the labor movement in the country by reviewing the economic condition and emphasizing on the wage negotiations. NTUC helped the Singapore government in restructuring the economy. During this time, the labor movement became improved and the problem-solving approach taken by the government helped the country to strengthen the labor management relations (Stats.mom.gov.sg, 2016). The problem-solving approach taken by the Singapore government helped the country in industrialization and it brought benefits not only to the employers but also to the society and workers.
However, in 1980s, the conflicting situation occurred in the labor management relations in Singapore due to the economic recession. NWC played a vital role in managing this conflicting situation and in 1985 NWC recommended the labor unions to accept the cuts in their CPF (Central Provident Fund) (Globalurbandevelopment.org, 2016). This also helped the country to recover the recession quickly.
In Singapore, there were four key players, who helped to improve the labor management relations in the country. These key players were – Ministry of Manpower, Singapore National Employers Federation (SNEF), National Wages Council (NWC) and the National Trade Unions Congress (De Dios, 2016). As stated in the above discussion, till early 1960s, the labor management relations in Singapore were much weak due to excessive unemployment, social unrest, political instability and frequent strikes. However, to improve the situation and develop the economy of the country, the government started to focus on the industrial relations or labor management relations (Lin, 2015).
The Ministry of Manpower or MOM is the workforce governing body in Singapore, which formulates the policies for workforce management and for solving the workforce related issues. At the same time, the implementation of these policies is also the responsibility of Ministry of Manpower (Mom.gov.sg, 2016). In building better labor management relation and maintaining the same the role of MOM is very important. The primary aim of MOM is to create a workforce that can compete in the international market and secure the future of the country’s economy. Katz, Kochan and Colvin (2015) stated that the Ministry of Manpower in Singapore is responsible for maintaining the industrial peace. The traditional responsibility of MOM is to solve the industrial disputes by using the rules and regulations.
At the time of improving the industrial relations or labor management relations in 1960s, MOM worked together with NTUC and SNEF and brought different strategies to improve the situation (Lim, 2015). Currently, MOM is working with the social partners in Singapore to provide more social facilities and solve the conflicting situations between the workforce and management. MOM has developed various innovative strategies like, work-life-balance and flexible wage rate to improve the human resources in the country.
The Singapore National Employers Federation was founded in the year of 1980, when the economy of Singapore was suffering from recession. The SNEF was originated by the amalgamation between National Employers Council and Singapore Employers Federation. Presently, 18% of the total workforce of Singapore is the members of SNEF (Stats.mom.gov.sg, 2016). The vision of SNEF is to maintain the industrial harmony in the country. The Singapore National Employers Federation helps to improve the working environment as well as working life of the employees. It has helped in improving labor management relations in Singapore by joining in Singapore Tripartism. The primary activities of Singapore National Employers Federation are as follows:
As a participant of Singapore tripartiate, Singapore National Employers Federation has helped to implement the workforce laws and policies properly. At the same time, SNEF has also helped in enhancing the competitiveness and the sustainability of the workforce in Singapore.
The National Wages Council was developed in the year 1972. De Dios (2016) mentioned that the labor movement in 1970s was boosted by the introduction of National Wage Council. The National Wage Council has played a vital role during the recession in 1980s. The main contribution of National Wage Council is in negotiating during the conflicting situation in 1980’s recession period (Singstat.gov.sg, 2016). The National Wage Council won the confidence of the employees by implementing the fair wages in Singapore and at the same time, it also won the confidence of the employers by implementing improved workforce governing policies. The fair wage rate set by National Wage Council was very helpful in improving the labor management relation in early days (Lim, 2015).
The National Trade Unions Congress was founded in the year of 1961. Currently, the National Trade Unions Congress has total affiliates trade unions of 60 and the total number of membership is 530000 (Brage.bibsys.no, 2016). National Trade Unions Congress played an effective role in developing a better labor management relation in the previous years. The major role played by the National Trade Unions Congress is in stabilizing the prices and the worker’s purchasing power. The National Trade Unions Congress set three organizations to improve the labor management relations in a better way. These three organizations are – Employment and Employability Institute, Consumer Association of Singapore and Ong Teng Labor Leadership Institute (Globalurbandevelopment.org, 2016). It has provided several benefits to the members of the Union and the benefits include scholarships, insurance coverage, rebates, savings on products, discounts, grants and training subsidies.
Therefore, from the above discussion, it can be understood that the key players of labor management relations have helped to improve the industrial relation or labor management relations in Singapore to the high extent (Stats.mom.gov.sg, 2016). Each player has contributed to the labor management relations from different sides and helped in improving the economic condition in Singapore.
The labor management relations in Singapore have helped the country in achieving more competitive advantage in the international market. In order to improve the labor management relation, the Tripartism came in to existence (Katz, Kochan & Colvin, 2015). The primary aim of Tripartism was to develop a strong labor management relationship in Singapore. Due to the introduction of Tripartism, the working conditions in Singapore were improved and the employment opportunities were increased. The Tripartism helped to improve the GDP growth rate of the country. For instance, the average GDP growth rate per year during 1960s was 6% per annum, which increased to 10% per annum after the introduction of Tripartism (Brage.bibsys.no, 2016).
Due to the improved economic condition, the country was able to decrease its total production cost. For example, during 1970s, the production cost in Singapore was decreased by 33% (Brage.bibsys.no, 2016). As the tax incentive schemes were improved, the small business organizations enjoyed tax benefits. At the end of 1970s, the GDP of the company grew by 25% (Mom.gov.sg, 2016). In 1980s, the IT industry of the country was improved. Tripartism took special care of the training of the IT workers. The proportion of the skilled workers increased from 11% to 22% between 1979 to 1985 (Mas.gov.sg, 2016). The export sales of the country were increased by 10 times till 1990s (Singstat.gov.sg, 2016).
The number of foreign business organizations was 400 during 1990s. In 1990s, the Singapore economy grew by 8%. From 1999 to 2004, the foreign reserves of the country increased from near about $76000 US million to near about $98000 US million. In 1990, the per capita GDP of the country was US $13000, which has been increased to US $56000 in 2015 (Mas.gov.sg, 2016).
On the other side, the introduction of National Wages Council and the Flexible wage rate system, the labor management system of the country was improved. The National Wages Council implemented effective wage rate strategies that satisfied the workforce in Singapore. Proper regulations and governance of NWC helped to increase the wage rate in the country (Brage.bibsys.no, 2016). As per the statistics, the average monthly wage rate in Singapore in 1989 was 1302 SGD per month, which has increased to 5483 SGD in 2016 (Singstat.gov.sg, 2016). As per the statistics provided by MOM, the nominal gross monthly income of the employee in Singapore has increased by 5.5% from 2006 to 2015 and the real gross monthly wage rate increased by 2.6% during the same time span (Tripartism.sg, 2016). The flexible wage rate has helped the employers of the country to manage their business at the time of economic trouble. Due to the introduction of flexible wage rate, the employers in Singapore were able to run their business by decreasing their contribution in the employees’ Central Provident Fund (Singstat.gov.sg, 2016).
On the other side, the foreign investment inflow has also increased due to the improvement in the labor management relations. As per the statistics, in 1970, the percentage of foreign investment inflow was 16.85%, which increased to 31.63% in 1979 (Brage.bibsys.no, 2016). After that, the amount of foreign investment inflow increased at a high speed. According to the statistics, in the year 2010, the total foreign investment in Singapore in stocks was $625.8 billion, which increased to $761.6 billion in 2012 and $1024.6 billion in 2014 (Stats.mom.gov.sg). With the increase in the wage rate, the rate of labor strike in Singapore decreased from 1960s to the current financial year. During 1960s, the labor strike rate in Singapore was near about 60 days in a year, which has decreased to 10 days in year in 2016 (Globalurbandevelopment.org, 2016).
Therefore, from the results of the analysis, it can be understood that the improved labor management relations have helped to develop the economic condition in Singapore. The improved industrial relations has also developed better infrastructure within the country, which ultimately helped in gaining the competitive advantage in the international market (Lin, 2015). The stable economy of the country has attracted the foreign investors, which helped the country to increase the employment opportunities. Hence, it can be said that the labor management relations is very essential for achieving better economic condition.
Conclusion
In this study, it has been identified that the labor management relationship in Singapore has been developed during many years. The development started in 1960s, when the economic condition of the country was weak and the country did not has any improved infrastructure to attract the foreign investment. There were huge numbers of labor strike and the rate of unemployment was much high. However, the introduction of Tripartism helped the country to improve the situation. The situation of the country started to improve from 1970s.
The study has also identified that there are four key players behind the improvement of labor management relations in Singapore. These four key players are – Ministry of Manpower, , National Wages Council (NWC), Singapore National Employers Federation (SNEF) and the National Trade Unions Congress. The country has gained several benefits from all of these four key participants. The infrastructure of the country has improved and the employer as well as employees both became satisfied with the new policies and regulations. On the other side, due to the improvements in the labor management relations, the country became able to gain some competitive advantage in the international market. The economic condition of the country is much improved as per the statistics. Per capital GDP of the country has been increased from US $13000 in 1990s to US $56000 in 2015. At the same time, the foreign investment inflow in the country has also increased at a high rate. Along with these improvements, the rate of labor strike has decreased from 1960s to 2016. Hence, on overall basis, it can be said that with the improvements in the labor management relations, the economic growth has taken place in Singapore.
Reference List:
Globalurbandevelopment.org. (2016). Globalurbandevelopment.org. Retrieved 1 October 2016, from https://www.globalurbandevelopment.org/
Mom.gov.sg. (2016). Ministry of Manpower Singapore. Retrieved 1 October 2016, from https://www.mom.gov.sg/
Mas.gov.sg. (2016). Monetary Authority of Singapore (MAS). Mas.gov.sg. Retrieved 1 October 2016, from https://www.mas.gov.sg/
Katz, H. C., Kochan, T. A., & Colvin, A. J. (2015). Labor Relations in a Globalizing World. Cornell University Press.
Lim, L. Y. (2015). Singapore’s Economic Development: Retrospection and Reflections. World Scientific.
De Dios, A. (2016). Packaging Talent: The Migrant Creative Labor Management of Overseas Filipino Musicians. In International Migration in Southeast Asia (pp. 181-209). Springer Singapore.
Lin, C. J. (2015). The Reconstructing of Industrial Relations in Taiwan’s High Technology Industries. Journal of Contemporary Asia, 45(2), 294-310.
Singstat.gov.sg. (2016). Singstat.gov.sg. Retrieved 1 October 2016, from https://www.singstat.gov.sg/
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