Systems Theory and Frameworks of Employment Relations in China - Coursework Example

National and international influences of systems theory and frameworks of employment relations on China. Introduction In a narrow viewing, Employment relations refer to the interactions that exist between individual employees and employers. However, in its wider scope it can refer to the type of interactions that exist between states, employer and employee associations, and organized labor. It not only involves the micro-level relations predominantly taking place in between individual managers and employees but also the macro-level interactions between extraneous institutions set up to govern such relations (Gennard and Judge, 2002). Systems theory of employment relations and frameworks draws on pluralist frame of reference of Dunlop’s (1958) systems, which argues that these relations are best regarded as a sub-system of the wider social system. This theory holds that work in governed by a wider range of formal and informal rules and regulations whose establishment is determined by a wider environmental context, covering everything from recruitment, wages, performance, hours, holidays, and a number of other details of employment. It asserts that these rules and regulations are what industrial actors always try to determine. China being one of the most industrialized countries, I saw it wise to discuss in this paper the national and international influences shaping her employment relations based on the theory mentioned above. China with the largest human population in the world has a labor force of 778.1 million (2003 estimation). When viewed from the point of occupation, 50% of the country’s labor force is in agriculture, while 22% is in industry, and 28% in services. The share of this sector in total does not commensurate to the percentage of people employed: industry contributes 53.9%, agriculture 14%, and services 32.3%. China has an inflation rate of 1.2% and 10.1% of unemployment rate. The idea of justification for rejecting argument especially those concerning works control over factories in favor of the organization of the economy under a particular party apparatus which would manage the manufacture and distribution in the name of the herd (chen, 2001)is clearly demonstrated in Lenin’s argument (2001) that the arrival of socialism in the underdeveloped regions meant that Marx’s prediction “the withering away of the state would be protracted” would first have to carry out uncompleted tasks of industrialization to allow the building of socialism. Based on this, the Chinese industrial relations were characterized by: centralized trade Union federation, rejection of autonomous forms of workers’ organizations in favor of singled ones, importance of the state enterprises as the center of distribution and productivity of basic necessities and services. Although initially the Chinese community party was committed to the welfare of its workers, the party nevertheless was against any independent action by workers and therefore designated the All-China Federation of Trade Union (ACFTU) which served as the official intermediary between workers and the party state. Recent changes While china’s employment relations are known to have undergone significant and notable changes since the implementation and enacting of the four modernizations reform program in 1978, the party, ‘Chinese party’ has maintained its state of being in power (Chen, 2001). The Chinese economic reform that leads to the transformation of labor relations has proceeded in two directions, the first being, newly formed nonpublic-owned sectors including joint ventures and private enterprises which encompass public owned sector and attack the latter’s privileges (Baek, 2000). The second direction is, the internal structures of the state owned enterprises (SOEs), which have also undergone considerable change. In pursuit to achieve the above mentioned goal, the Chinese government has pursued three interrelated policies in regard to labor: it has first introduced labor contract systems. This experiment was made into a law in 1986 after starting in 1983. This new system brought into existence the “contract system employees”. It asserted that the contract must be at least twelve months and had provisions covering major topics of job requirement, probation, working conditions, discipline, remuneration, and penalties. Additionally, the old style temporary workers working under labor agreement of limited periods remained intact. In the state and collective owned enterprises there are permanent, contract and temporal workers. In foreign enterprises, there is a mix of contract and temporal employees, and in the individual owned, there are only temporal workers (Zhu, 1995). Secondly, the wage system has changed to issue in disparities. The idea here is that the performance should be connected with the enterprise productivity and individual performance (Zhu, 1995). The third policy is that, the government has broadened the social security by transferring the responsibility of social welfare to individual units from work units (Baek, 2000). Under this policy, the work unit based on social safety net that guarantee fulltime and lifetime employment has been disintegrated, and has brought in insurance systems. Ideological issues The concept of nationalism and nation-state is deeply embedded in the Chinese communism party ideology. In the mid 19th century, it had its roots in the resistance to the occupation of china by the Western powers (Knight, 2003). The split from communist Russia and Cultural Revolution diminished china’s contact with the other parts of the world and the stress was made over self reliance and independence. Following Mao’s death in 1978, Deng Xiaoping legalized the introduction of economic measures based on capitalism which was thought to gain rapid economic (Knight, 2003). This aid in “opening to the outside” i.e. (Duawai Kaifang), or the “open door policy” meant the opening to western ideas and culture in addition to western economic policies. However, even with this shift in policy, the Chinese party leaders still cling to consider that the world should have nation-states. Privatization A big number figuring to thousands of state owned enterprises were long sold as a result of stress that was put on privatization in the 15th session of the communist central party committee of Chinese in 1997, (Taylor, 2002).this is a policy that was seen as a fundamental element in heightening efficiency and achieving market socialism. Privatization in china can take several different forms, but it essentially involves the transfer of control from public to private interests (Taylor, 2002). Ideologically, in china privatization is taken as an attempt to improve on compliance to reforms by the worker and managers aimed at financial self-reliance. The emphasis of privatization is on the financial self reliance of the enterprises with basic interest to have the political accountability intact. A number of bankers and economists in china consider ‘big bank’ or ‘shock therapy’ whereby the state withdraws fast and indefinitely from ownership and the market forces take over to fill the left gap- as the only left solution to overcome the evils of socialism. Nevertheless, the privatization of china has occurred with an intact authoritarian system and has adopted a systematic and incremental approach. According to a study conducted by Bill Taylor (2002), the writer came into conclusion that, “while the state sold important ownerships over its enterprises, the aspect of privatization is still complex than mere share ownership. Control and ownership are largely aligned, and control is mainly maintained within the firms”. It was clear that enterprises more often had internal managers and cadres as board of directors and the enterprises represented constantly existing interests rather than a transformation and change in the ownership structure. This is in exception of joint ventures where identifiable partners were visible and leadership was clear according to the quantity of shares owned. Further, in cases of 100% enterprise ownership by the corporate management, it was entitled to an agreement that senior managers would control and run the enterprise according to a contract and with clear targets mainly set by the agencies. According to the leaders of these enterprises, the state still imposed direct pressure in the shape of forced managers into bigger and larger enterprise groups run by the state authorities. Moreover, the state had indirect influence and force such as following the government cadre system to know how the enterprise is being managed. One thing that clearly brings itself out in these findings is that the state no longer involves itself in an enterprise’s finance. Privatization has therefore issued some autonomy to the plant for it to 0perate independently from direct external interference. Consequently, this has led to policies by managers whereby market is now being used as main criterion by which individual performance as well as organizational performance is measured. There has existed a gradualist reform movement, where privatization has had very little but definite impact on the reconstitution of industrial relations. There is heightened pressure, threat of redundancies and discipline. There is also the removal of stage guarantees and market is now seen to be real. Managers and other leaders are now freer to take decisions, though they are again responsible to the state for whichever decision they make especially financial decisions. The party is also still very significant and central to the entire system as “the cadre’s career is still decided by the party, the workers also still have a say over the material and performance of cadre (Taylor, 2002). Collective bargaining In any planned economy, the reconciliation of interests of the leaders and managers and the workers is carried out under a well structured administrative framework and through guarantees specifically from the government. There are observations that have been make over the growing divergence between the interests of workers and managers due to the recent attempts of the Chinese government to integrate itself with the world economy. This divergence was demonstrated by an increase in labor disputes where it was observed that the number of registered labor disputes went up to 155,000 in 2001 from 33,000 in1995. Following this divergence, a new institutional framework was formed which centered on: contractual and legal regulations of labor relations, development of workplace collective consultation between employees and trade unions, a system of tripartite disputes, and most recently developed a system of tripartite consultation (Clarke, 2004). The labor law of 1994 formalized the individual labor contracts. Nevertheless, In 1992 Trade Union Law, a legal foundation for the collective contracts was laid. From the beginning, the stress by the government and various enterprises was basically imposed on individual contracts but the ‘All Chinese Federation of Trade Unions (ACFTU)’ led a campaign and managed to secure the approval of the party and the state, which later led to an increase in collective contracts. The parties were supposed to make sure that they follow to the prime all the guidelines issued by local labor bureaus and all government directives in these collective contracts. Still under this, the government bodies have the mandate to check the authenticity of the contracts, but the enterprises develop their own practices. On the other hand, the ACFTU is defending the rights of employees over violation and on the other it is selected by the party and is supposed to promote reform and maintain social stability. The traditional method of consultation is also still in use to ensure that the rights and interests of the workers and staff members are represented by the trade unions (Clark, 2004) Conflict Resolution Beginning in the early 1990s, there was a growing incidence of Wildcat strikes in China without any union presence or even organization, according to Seung Wook Baek (2000). The governmentally initiated economic reforms had drifted away from workers and had put many vulnerable enterprises into bankruptcy, which resulted in a rapid increase in labor disputes. It triggered responses from the government to recognize the need for establishing bargaining structures and it was done. Among other responses, the Chinese government was compelled into establishing labor disputes in through institutional procedure. Conclusion ‘Employment relations’ is clearly the heart of all growing organization in various countries. It has its roots in the industrial revolution which of cause created the modern employment relationships. It is clear that employment relations are highly influenced and shaped by national and international involvement. During the planned economy period in china for instance, the reconciliation of the interests of workers, the state, and managers was achieved within a national administrative framework which was guaranteed by the government and the communist party (Clark, et al. 2004). Government policies, workers and management were not separate parties (Taylor, Chang, Li, 2003). References Rose, E. (2008). Employment relations. New York: Pearson Education Press. Taylor, B. (2003). Industrial relations in China. Chelternham: Elger Press. Palmer, G. & Gardner, M. (1997). Employment relations: industrial relations and human resource management. South Melbourne: Macmillan Education Press. Wailes, N. & Lansbury, R. (2011). 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