Sunday, October 25, 2015

Can A Non-Union File A Strike Notice?

The democratic system in the Philippines will earn the unenviable reputation, not respect, of allowing former employees of a company to file a notice of strike against their former employer. Worse, the Department of Labor and Employment considers the notice a labor issue. The DOLE has scheduled a conciliation meeting between the group of Gerardo Rivera and 11 of his supporters who were part of 600 workers of Philippine Airlines separated from the service and paid whatever benefits are enshrined in the collective bargaining agreement.

Labor Secretary Rosalinda Baldoz, known for her objectivity in settling labor-management disputes made the fatal mistake of accepting the notice of strike instead of rejecting it outright for the not complicated reason strikers do not have a union because they ceased to be workers of Philippine Airlines. Rivera and his group do not even allege they were forcibly yanked out of their jobs. There is no controversy in their separation from the service. If there were, the retired employees themselves put the issue on ice by accepting retirement benefits.

The first anomaly the DOLE appears to accept is the fact that Rivera called for an election of officers among the retired workers. He claimed he was elected president. A labor arbiter correctly ruled the election of Rivera ”produced no legal consequence.” That should have left the non-issue on ice but Secretary Baldoz is recognizing it and in fact considers the notice a labor issue.

The fact that the workers who are all members of PAL Employees Association (PALEA) have not elected their officers is a clear suggestion there is harmony between management and the employees. How can this harmony be disturbed by a strike of employees who ceased to be members of the union by their separation from the service?

Yes, the 600 retired employees can form an association among themselves for any purpose. But never as members of the union in their former employer.

In fact, they cannot form a union because, if some of them found jobs elsewhere after leaving PAL, they are in the service of several firms. But even if they were in one company they cannot form a union in PAL least of all file a strike notice against the national flag carrier. That company is not Philippine Airlines. One does not have to have too much gray matter between the ears to consider the fact the retired employees ceased to be members of the union in PAL. In fact, the law may prohibit them from considering themselves as members of PALEA because they are not.

There seems to be very little appreciation if there is any at all, of the far-reaching consequences of accepting a notice of strike by a non-union against their former employer. Carried a step farther than conciliation, the decision of the DOLE can bring the harm that strident members of vigilant unions caused their employers.

Many companies have implemented a redundancy program. Benefits were offered to workers long before they are due to retire. They laid their hands on large sums of money. Most of them were young enough to find other jobs elsewhere.

The companies that retired them recovered what they considered was a bloated payroll cost. That is the arithmetic of redundancy retirement. By accepting the notice of strike filed by Gerardo Rivera who is no longer an employee of PAL, is it not possible former members of other unions in other companies can follow what Rivera is doing to PAL?

They may know they will not get anywhere but they succeed in harassing their former employers with the consent of the Department of Labor and Employment. How does this sit in the minds of foreign investors who are attracted to do business in the Philippines? The DOLE should know its decision in the non-existent PALEA union of Gerardo Rivera does not help lure foreign investors to the Philippines.

There is nothing to conciliate. The fairness of or lack of fairness of the demands of Rivera and 11 of his cohorts is immaterial to PAL. Rivera’s group has no employer to strike against, not PAL, anyway. In that sense the members of PALEA who are so because they continue to work for the national flag carrier can bring a case to court challenging Rivera for the use of the union name PALEA. Rivera should recognize the fact he and 600 other employees of the airline ceased to be members of the union when they resigned and accepted an estimated P800 million in retirement and other benefits. On the average each of them were paid more than P1.3 million. They drained the purse of PAL but the airline made good its commitments under the CBA.

Why did Standard Electric and a giant garments company transfer to China? Because their operations were paralyzed by a few hothead members of what they called was their vigilant union.

There has been real and apparent industrial peace in the country during the past five years. They ugly head of strident so-called nationalist union members should not allowed to rear again. The DOLE is unknowingly bringing back the dark days of the economy stymied from growing partly due to troubles brought about or created by strident union members. 

Gerardo Rivera, “president” of the non-existent PAL union as far as the 600 retired workers of PAL are concerned, is not even known to be strident. DOLE is simply making him so.

* * * * 

email: amadomacasaet@yahoo.com

source:  Malaya

Saturday, October 24, 2015

UBER DRIVERS ARE EMPLOYEES, OREGON REGULATOR SAYS

An Oregon regulator asserted on Wednesday that Uber drivers should be classified as employees under state law, an announcement that could impact the company’s operations there, The Oregonian reports.
Brad Avakian, commissioner of the Oregon Bureau of Labor and Industries, stated in an advisory opinion that Uber drivers should count as employees under Oregon law because they benefit the company and are financially dependent on it, despite being able to use their own cars and choose when they want to work.
The opinion serves as guidance and will have no immediate effect, but could prompt dissatisfied drivers or legislators to take up the issue in court. That’s what’s been happening in California, where a district judge granted class-action status last month to a lawsuit that alleges Uber drivers were misclassified as contract workers. If the case is successful, tens of thousands of drivers could potentially be reclassified as employees—upending Uber’s business model. In June, the California Labor Commission ruled that a former Uber driver was in fact an employee and asked the company to reimburse her, but the decision did not apply to other Uber workers.
Avakian’s opinion did not mention other businesses that rely on contracted labor, such as Lyft or Instacart, but future regulation could impact the gig economy, at least in Oregon. "I would expect that [Uber] would provide their employees all the benefits and protections they’re entitled to under Oregon law," Avakian told Portland-based newspaper Willamette Week.
Uber, meanwhile, said it was surprised by the findings and strongly disagreed with them. An Uber spokeswoman told the publication that Avakian's opinion is "full of assertions that are plain wrong. It’s disappointing that a public body would have so little regard for the facts."
source:  http://www.fastcompany.com/

Tuesday, October 20, 2015

ADB: Educational policies yield mixed quality in work force

EDUCATION POLICIES of the national government had mixed results in raising the skills of its working population, boosting their employment prospects, and improving access to schools, the Asian Development Bank (ADB) said in a new report.

In the 2015 edition of its annual Key Indicators for Asia and the Pacific, the Manila-based lender said education investments of Developing Asia led to a doubling of average schooling to eight years between the years 1970 to 2010, in turn resulting in higher education levels, enrollment and literacy rates.

The ADB also cited, however, the need for the Asian work force to improve their skills through specializations and additional educational years. Agricultural workers, to cite one sector, must adopt and learn technical skills to avail themselves of jobs in sectors with higher pay such as manufacturing and services.

“The data reveal the simultaneous presence of under and overqualification,” the ADB said.

In the Philippines’ case, Filipinos are overqualified to take on positions that are available in the job market, the ADB said, noting “there are far more people unemployed or in other types of temporary wage jobs with the relevant level of education and technical qualification than employed in those occupations, except for health professionals, teaching, business administration and managerial administration.”

Thus, policy makers should make informed educational investment decisions where the work force supply meets the needs of the labor market. “In a nutshell, economies that invest in providing high-quality education [are] likely to be the least affected by disruptive innovations -- and will be better placed to exploit them -- because solid foundational skills are the basis for adapting to new opportunities and technical tasks driven by these shifting occupational demands,” the ADB said.

In improving educational quality for vocational courses, the ADB also cautioned the Philippines’ expansion of its skills training programs, particularly in hiring and training teachers. “Expanding TVET (technical vocational education and training) by reskilling existing teachers as opposed to focusing on hiring the right teachers with relevant industry experience and knowledge may achieve little in improving students’ technical skills and occur at the cost of less development of critical foundational skills.”

In providing financial aid, the development bank noted the Philippine government’s mixed results in providing financial packages to help boost enrollment. “In the Philippines, for example, CCTs (conditional cash transfers) were more effective at increasing enrollment among younger children compared to older children.”

“The Philippines’ Study Now, Pay Later Program is just one example of a loan program that was not able to achieve financial sustainability because of institutions that were not sufficiently strong enough to enforce loan repayments,” the report also said.




source:  Businessworld

Saturday, October 17, 2015

Blinded by the son: Leadership succession in family businesses

Successful Asian family firms are founded and built by extraordinary people -- indeed, often some of the most interesting business players in the region.

Having had the privilege to interact with and interview a number of them, and having studied quite a few more, I have seen that they share a number of characteristics.

Asian family firm chairmen -- they are almost all male -- are typically extremely entrepreneurial, visionary and courageous. Usually, they come from modest backgrounds and experienced hardships or crises early in life that shaped their outlook on risk taking.

Starting out modestly, they frequently said “yes” to opportunities that others shunned. The more they succeeded, the more confidence they gained.

They have usually tried various businesses -- failing in some while being extremely successful with others -- and as a result, built a diversified group of enterprises.

These “superman” founders possess a truly outstanding intuition for “what will work” without being able to articulate why. Almost without exception, they are opportunistic, action-driven and pragmatic, taking all decisions personally as they grow their businesses.

TRUST ISSUES
But as much as I admire them, I have also noted over the years that they tend to have a blind spot: they fail to grasp the quality of their sons as successors.

It is rare to come across a chairman who has full confidence in a child in line to succeed him. Even if they do not directly say so, their actions towards their sons speak volumes.

(Daughter-successors, it should be said, are rare. But the few cases I came across seem to follow the same pattern.)

Supermen (or Superwomen) are not born every day, and the chances of a founder’s children mirroring his unique qualities are slim. Rarely are children younger copies of successful founders.

Yet, the superman-chairman expects nothing less and is deeply disturbed if a son does not match his extraordinary entrepreneurial flair.

Sometimes, this lack of trust in an heir becomes a self-fulfilling prophecy: by hovering over their sons and not believing in them, these chairmen unconsciously create the very conditions for their sons’ failure.

Moreover, they also generate a lot of avoidable tension in the firm and the family.

However, looking for a superman-junior may not make business sense. If the founder has done a great job building a business empire, it is likely that the most effective successor who can bring this Asian family business group to the next level of professionalism is a person with rather different qualities.

Many of the most successful Asian family empires are strong in terms of hands-on leadership, but weak on systems and middle management quality.

Indeed, these business groups seem too far stretched and too haphazardly built to survive beyond their extraordinary founder.

When I visit some of these firms, I cannot help but notice how the senior management run after the chairman on a daily basis, without being able to develop long-term priorities or consistent policies.

Most members of the “lucky sperm club” -- to borrow a term from Warren Buffet -- intuitively know that reliance on a superman-founder for each and every decision is not going to make their business last for generations.

What these founder-dependent empires need is not another superman, but a leader who can transform their own great entrepreneurship into a great legacy through solid governance systems -- in short, someone who can stabilize the group and give it strategic direction.

Indeed, what is needed at this stage may be the very opposite of a business wrapped around a super-leader: it is a super-business that can survive without an outstanding leader.

Who would be best qualified to lead such a transformation from a personalized business towards a long-lasting legacy?

Most likely, it would be someone who can credibly hold a team of competent top-managers together, and who can command respect from banks, partners, employees and authorities, while also keeping the entrepreneurial spirit alive.

What a superman should wish for is someone who can enshrine the chairman’s values in the business, and turn it into a long-lasting legacy, without actually having to take all decisions personally.

In summary, the perfect heir is not necessarily a younger copy of the founder.

Rather, the founder of a successful family group should judge their offspring not by their own unique and rare characteristics, but think about what the business really needs going forward.

While it is of course possible that a son is unsuited for the firm, a chairman must apply the correct metrics.

By taking a broader angle on the future of the business, it might become apparent that perhaps that not-so-very-entrepreneurial son is the perfect choice after all.

In fact, when looking for what the business needs, it may be wise to cast the net wider: would, perhaps, a capable daughter, nephew, or trusted outsider be most suited to bring the family business to the next level of professionalism?

This blind spot can be avoided with a careful look in the mirror from multiple angles.

Doing so will prevent avoidable friction and go a long way towards a long-lasting legacy of excellence.

Marleen Dieleman is Associate Professor of Strategy and Policy at the National University of Singapore Business School, which runs the Asian Family Business Programme in November 2015. More details are available at execed.nus.edu/family-business. This piece is the last in a series of five insights from the school for Asian family businesses looking to grow without losing control.


source:  Businessworld

The impact of consumer-driven human resources

Over the past decade, there has been a growing trend among global organizations to treat their employees as internal consumers. The most innovative of these companies have gone a step further by embracing the concept of “consumer-driven human resources (HR)” -- that is, a mind-set and an operating philosophy that acknowledge and respond to the increasing variety of work-related choices available to employees.

This approach has significant potential for impact on the design and administration of total rewards programs, thus influencing the work and careers of total rewards professionals around the world.

Companies adopting the characteristics of consumer-driven HR recognize that employees today have a broader level of information and choice in many areas, including a greater range of career options, a wider array of employers from which to choose, and more flexible programs offered by specific employers (with more features selectable by employees).

These expanded choices have in turn made corporate life a more efficient marketplace for its increasingly savvy employee-consumers. The roots of this shift in program design actually go back to the 1980s, when companies introduced choice-based programs, such as flexible benefits and cafeteria-style plans.

Today’s employees are more mobile, educated, technologically enabled and short-term-focused than ever. They also have become informed consumers of their organizations’ brands, culture, and compensation, benefits, and career development programs. And with the first Generation Z employees entering the workforce, companies can expect that the preferences and expectations of their employee populations will continue to change, becoming more personalized and more sophisticated along the way.

In response to this emerging consumer-employee, leading companies have turned to consumer marketing theory to gain insights about -- and connect with -- their current and potential talent. Just as companies are using technology and Big Data to direct products and services to ever more carefully targeted segments of customers, organizations are starting to understand the different segments of their varied workforces, including what motivates them and what elements of the employee value proposition they value most.

The 2014 Global Workforce Study conducted by Towers Watson reports that 70% of employees believe their organization should understand them to the same degree that they are expected to understand external customers. Yet only 43% of employees report having an employer that understands them in this way.

A central tenet of marketing theory suggests that not all customers want the same things. The corollary is that not all customers are equally important to the company. Both concepts also apply to the market for employees. Companies that take a “consumer-driven HR” approach use consumer marketing principles to define and understand employee groups by what they need and by their contributions to the success of the business.

For example, the most innovative companies: (1) segment the employee market. Innovative organizations begin by defining employee segments in ways that extend beyond classic demographic groupings.

Effective segmentation criteria leave generous room for creativity in exploring the values, attitudes, preferences and relative contributions of the employee population. Most organizations begin by collecting information from standard demographic and generational categories, but more relevant segmentation variables emerge, including strategically critical roles or locations, actual and potential performance levels, engagement levels, life stage segments, and attitudinal categories.

These data provide organizations with additional information and insight beyond what can be derived from conventional segmentation approaches.

(2) Measure how employees value rewards elements. After segmenting the employee population, companies can test rewards elements to determine which have the highest perceived value to particular employee groups.

The objective is to understand and define the value proposition with the greatest appeal to each group.

Consumer-products companies do the same thing when they conduct sophisticated market research to understand how their target segments will respond to the features and price of a proposed offering. This research can take a number of forms, including focus groups, data mining, employee surveys, and trade-off analysis (which presents employees with scenarios to determine what they view are the most and least valuable components of their rewards package).

(3)Analyze the financial and behavioral implications of rewards. Once companies understand what employees value (market researchers call these utility preferences), the information can be translated into guidance for determining rewards that the organization can deliver. Program design hinges on the relationship between what employees value (and the resulting behaviors, like commitment and engagement, that these programs encourage) and the cost to provide a specific array of rewards.

The ultimate goal is for the company to identify ways to fund more desirable rewards, by shifting investment away from less desirable rewards areas (those with lower perceived value relative to cost).

Organizations that embrace consumer-driven HR have learned that by understanding and acting on employee needs and preferences, they are more likely to have motivated and committed work forces, even with total rewards budgets that are no greater in aggregate than the investments of their peers. Their employees will be more engaged, serve customers better, innovate more frequently and consistently, and protect company assets more conscientiously.

Experience with organizations that have performed the return on investment analysis demonstrates that superior financial results become part of the equation as well.

Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, financial and risk management. For more information, please write to Leah Denoga at leah.denoga@towerswatson.com, call 902-0731 or visit www.towerswatson.com/philippines.



source:  Businessworld

Wednesday, October 14, 2015

Indonesia’s 10-to-1 rule may block FDI

FOR companies worried about a new Indonesian law requiring 10 locals to be hired for every foreigner, the government has a workaround: stock up on drivers and “office boys” to make tea.

“There is no need to be afraid,” Ruwiyono Septy Priharso, head of the work permit section at the manpower ministry, told an audience of mostly foreign business people at a seminar on the rules. He suggested the quota could be filled by low-paid staff like office boys, a term that refers to mostly young men employed to do routine tasks. 

“They do not need to be permanent workers, but it is better if they are.”

The rules, first unveiled in July, are undermining appeals by President Joko Widodo for foreign direct investment (FDI) to help lift an economy growing at the slowest pace since 2009. The president, who has promised to cut red tape and is courting China to build infrastructure, may be facing a pushback by trade unions worried about rising unemployment in the world’s fourth-most populous nation.

The manpower regulations also require non-resident foreign company directors to obtain a work permit, a process that can take weeks and needs to be done within the country. International staff now need to get business visas in advance to attend internal meetings in Indonesia, do training, or for emergency jobs such as fixing machinery.

One stage in the visa process requires applicants to conduct a Skype interview with manpower officials. Mr. Priharso acknowledged that technical issues and a lack of staff were making this process difficult, causing a backlog.

“The latest regulations contradict the claims that Indonesia wants to create an FDI environment that is more attractive than its Southeast Asia neighbors,” said Chris Wren, the executive director of the British Chamber of Commerce in Indonesia. “Some members are already planning to host regional meetings in Singapore rather than Indonesia. 

Some UK businesses that were considering Indonesia as a regional hub are having a re-think.”

The rules follow a series of other protectionist measures and policy u-turns this year. Trade Minister Tom Lembong, a former private equity manager who has reversed some policies since his appointment in August, said the restrictions on foreigner permits and local worker quotas is “a big problem” being created by bureaucrats.

“For every one expat worker who comes in, that person creates between three and 12 jobs,” Mr. Lembong said in an interview last month. “You have to understand this is not coming from the president.”

The backlash against foreign workers has come despite a shrinking number in the country. Out of a total work force of more than 100 million, there were 54,000 registered foreigners as of August this year, down about 30% from 2012, according to the manpower ministry. The largest group, numbering 13,000, are from China, it said.

Mr. Widodo is looking to increase Chinese investment to build railways, power stations and dams, and local media have expressed concerns about an “invasion” of foreign labor.

“The central government looks at the economy, but regional governments need to protect the jobs on their patch,” said Said Iqbal, president of the Indonesian Trade Union Confederation. “These rules are the only ones able to prevent the Chinese from coming in droves.

They are a threat to Indonesian workers.”

Around 43,000 workers in Indonesia lost their jobs between January and September after cuts by industries such as garments, footwear, electronics and coal, the Bisnis Indonesia newspaper reported, citing Haiyani Rumondang, a director general at the manpower ministry. -- Bloomberg


Managers: Wise men or fools?

Two weeks ago, I had the pleasure of listening to Dr. Roseann Tan-Mansukhani, a faculty member of the De La Salle University (DLSU) Psychology Department, who talked about her study titled, “Wise persons in the community: Their actions, social interactions and roles” in a multidisciplinary research dissemination conference organized by the University Research and Coordination Office of DLSU. Tan-Mansukhani is one of the few individuals doing wisdom research in the Philippines.

In her research, which she undertook in a community in Ilocos Norte, she asked community members to nominate individuals whom they considered to be wise persons, and to describe their experiences as beneficiaries of the wise actions of these individuals.

Tan-Mansukhani said that these wise persons typically assumed influential roles in the community.

Aside from being the go-to persons for advice and other forms of assistance (“takbuhan ng bayan”), the wise persons also serve as a “mirror that reflects back” to other people what they can aspire to achieve -- that they, too, can be wise individuals.

It is not only the individual with whom the wise person interacts who benefits from the latter’s wisdom. The community also benefits in terms of being more cohesive (“mas buo ang barangay”). On top of being perceived as rational individuals, wise persons are valued for their emotional and social/interpersonal skills. They also exhibit virtuous lives in varying degrees, Tan-Mansukhani said.

Given that wisdom is seen as a desirable human trait, I wonder why this concept is not more commonly tackled in the discourse of business and management. Being wise is not given as much value as being more productive, making more money, or moving up the corporate ladder.

For managers of most businesses, it’s all about delivering results and achieving the financial bottom line, sometimes at the expense of the well-being of employees and other organization stakeholders.

In his book What Were They Thinking?: Unconventional Wisdom about Management, renowned management scholar Jeffrey Pfeffer talks about “feedback effects,” which managers often fail to consider when making decisions -- to the detriment of their organizations. When companies encounter financial difficulties, for example, those who run the business would usually bring down labor costs either by laying off people or by cutting wages and benefits.

While this managerial decision immediately brings down expenses, it could have unintended consequences that are bad for the company in the long run.

First, cutting salaries and benefits drives people to leave. And those who are most likely to find jobs elsewhere are the most talented people, whose skills, experience, and insight the company needs to turn the business around.

Second, those who are left behind deal with heavier work loads without additional compensation, creating a desire on their part to either slack off or to sabotage the company.

Obviously, these contribute to worse organizational performance and make it more difficult for the company to recover from its financial rut.

Wise decisions and actions are also influenced by the structure of organizations.

In many large and bureaucratic organizations, middle managers and frontline managers are constrained from exercising their judgment in many instances due to centralized decision-making, excessive controls, and inflexible rules. They are expected to simply follow predetermined criteria and standard procedures contained in thick, detailed manuals that are compiled to anticipate every conceivable circumstance to minimize mistakes in decision-making.

Those who are courageous (or who care) enough to raise questions or to challenge existing practices are seen as troublemakers by those in higher positions and as “fools” by colleagues who know that “rocking the boat” could get in the way of moving up the corporate ladder. This situation does not only discourage creative thinking and innovation among employees but also prevents the company from developing a new generation of managers who are reflective, able to handle uncertainty, open to contrary ideas, trustworthy, and truly wise.

Raymund B. Habaradas is an Associate Professor at the Management and Organization Department of De La Salle University, where he teaches Management of Organizations and Management Research. He is also the Director of the Center for Business Research and Development.

rbhabaradas@yahoo.com


source:  Businessworld