Mike Broad reports on what’s happening in HR around the world
EU directive forces rapid employer
Employer bodies are urging companies to rapidly comply with the final
version of the European directive on information and consultation agreed last
The new directive means that employers will have to inform and consult with
staff over changes to the business, such as restructuring and redundancies.
Companies in the UK have until 2005 to implement the directive, but Diane
Sinclair, employee relations adviser at the Chartered Institute of Personnel
and Development, said employers who do not already comply should be examining
their approach to consultation now.
"If companies act now to establish adequate procedures for informing
and consulting their staff they may avoid having to set up a works council in a
hostile environment," she said.
In a victory for UK business, EU countries have been given the right to
decide which enforcement measures are used to ensure compliance.
European unions push for pay rises
France’s socialist-led government
headed off a wave of protests by the police in December by making big
concessions on wages and working conditions. Other disgruntled professions are
expected to push large pay claims following the ease with which the concessions
In Germany, the powerful metal workers’ union IG Metall has
called for a pay rise of between 5 and 7 per cent this year, sparking concerns
that high wage settlements may delay the country’s economic recovery.
Klaus Zwickel, chairman of IG Metall, believes the pay rise can
be met due to increasing profits in recent years. The wage negotiations in the
metals and electronics industries, which are due to start in mid-February, will
set the trend for pay negotiations in the chemical and service sectors.
Gesamtmetall, the metal industry employers’ association,
dismissed the demand as ignoring "economic reality". But the union
appears unlikely to settle for less than 3 per cent.
Economists criticised the union for endangering Germany’s
economic recovery. Klaus Friedrich, chief economist of Dresdner Bank, said:
"Tougher international competition means companies are unable to pass on
high wage increases to consumers via price increases."
Euro success paves way for more economic reforms
European policy makers are pushing for further economic reforms
in the eurozone following the new currency’s successful launch.
Rodrigo Rato, economy minister in Spain and new chairman of the
eurozone’s group of finance ministers, claimed that people’s enthusiasm for the
euro showed they would support reforms to increase economic growth and
He said: "This shows Europeans want economic changes as
much as they want euros."
Rato identified the modernisation of goods and labour markets,
more efficient and flexible tax systems and full integration of financial
markets as important tasks.
Venezuelan president stands firm on ‘revolutionary’ business laws
Venezuela’s president is refusing to change a range of
‘revolutionary’ laws that are being opposed by businesses, unions and civil
Thousands of businesses closed for a one-day strike in December
as staff and employers protested against a package of 49 laws decreed by President
Hugo Chavez in November.
Business groups, the Venezuelan Workers’ Confederation and a
range of opposition civil movements claim the laws will curb investment, damage
the economy and lead to fewer jobs.
The laws include one that allows the government to expropriate
agricultural estates that are deemed to be unproductive, and another that will
increase royalty taxes in the crucial energy sector.
Work conditions improve under trade investigation
An investigation into Cambodian
clothes factories has led to improved working conditions and greater respect
for workers’ rights.
The International Labour Organisation investigated staff
working conditions in its new role of monitoring the trade agreement between
Cambodia and the US.
The trade agreement offers a 14 per cent increase in Cambodia’s
export entitlements to the US, providing it meets the ILO’s core labour
The investigation also found that while some employees are
over-worked and their unions face discrimination, there is no evidence of child
or forced labour.
The agreement is subject to annual review by the US Government.
Juan Somavia, director-general of the ILO, believes more
enforceable standards are needed.
"The global trade economy needs a floor of core labour
standards. It could take five years but labour rules are going to be
there," he said.
Japan cuts costs with job share arrangements
Japanese companies are embracing job
shares for staff to cut costs and stabilise employment levels, according to the
head of Japan’s largest employer association.
The unemployment rate hit a record 5.5 per cent in Japan in
November, but Nikkeiren chairman Hiroshi Okuda believes it is unlikely to rise
further because of the willingness of companies and staff to explore job
Okuda, also the chairman of Toyota, said: "The Japanese
people have been giving their support to Prime Minister Junichiro Koizumi ever
since he took office."
"There are a variety of work-sharing and management-labour
agreements being developed that will involve wage cuts."
He predicts that the Japanese economy will recover in the
second half of 2002.
"In the world economy, there have been indications of
Japan being swallowed by China. Japan must maintain superiority in
technology-oriented manufacturing and nurture human resources with
creativity," he said.
UK directors top European pay league
HR directors in the UK are the highest paid in Europe, research
by HR consultants Towers Perrin shows.
The Worldwide Total Remuneration Survey claims that the average
basic salary for an HR director working in the UK is 179,382 euros
(approximately $159,478) – a year-on-year increase of nearly 11,317 euros. When
bonuses and share options are taken into consideration, the average annual pay
package rises to 351,768 euros.
Belgium comes next with an average total package worth 340,119
euros. HR directors in France, averaging 239,606 euros and Germany 253,312
euros, lag behind.
However, European pay levels are way behind those in the US,
where the average is 507,232 euros.
Damien Carnell, principal of the executive compensation unit at
Towers Perrin, said: "The US has a high-pay, high-performance culture and
companies are quick to restructure and move people on if their performance is
not good enough – this is why it has the highest productivity globally."
A happy boss means productive staff
Business leaders’ moods affect staff performance and
consequently the bottom line performance of their organisations, claims
research in the Harvard Business Review.
The two-year study shows that dynamic and inspirational leaders
create more productive employees, who believe any challenge is surmountable.
However, bad-tempered, ruthless bosses create organisations full of negative
Emotional leadership is the most important task of chief
executives, claims the study. It calls on business leaders to perform a
five-step process of self-reflection and planning to understand the impact of
their moods and behaviour on their organisation.
The questions executives should ask themselves
include: Who do I want to be? Who am I now? How do I get from here to there?
How do I make change stick? And who can help me?
UK is a nation of full-time slackers
More than half of working time in the
UK is spent unproductively, according to a recent study.
The research, by management consultants Proudfoot Consulting,
shows that in the UK 52 per cent of work time was spend unproductively,
compared to 43 per cent in US, France and Germany.
Inadequate or over complicated management was the single
biggest cause – at 62 per cent – of lost work time among the 1,568 staff
surveyed. Low morale accounted for 17 per cent of lost time.