Problems in Humn Resources in the United Arab Emirates - Essay Example

The most importnt issues or problems in Humn Resources in the United rb Emirtes t the present time [Nme of the [Nme of the School] Introduction How firms mnge their humn resources is the product of wider socio-economic context. In United rb Emirtes, five key fctors hve shped nd continue to shpe HRM policies nd prctices. These re: the structure of the country's economy, the politicl environment, the structure of the lbour mrket, ntionl HRD strtegy nd ntionl culture. Following the gols of this pper, I will spek bout lbour mrket nd ntionl humn resource strtegy in this pper. Lbour mrket context In country of 44 million people, over 6 million were foreigners in mid-1990s representing no less thn 60 per cent of the working popultion nd more thn 93 per cent of privte sector employees (Cooper, 1996). ccording to n estimte by the l-Iktissd Wl-ml (1997) mgzine, no less thn 95 per cent of the new jobs in the 1995-2000 period were in the privte sector. There re four interrelted resons for the privte sector's resistnce to Emirtistion. The first fctor is lbour cost. The influx of chep foreign lbour during the pst three decdes led to the development of lbour-intensive privte sector, whose continued profitbility hinges on being given free hnd in the utilistion of foreign workers. lthough, since the mid-1990s, United rb Emirtes hs incresed the cost of the ltter by introducing compulsory helth cre for foreign workers, locl workers still re very much more expensive to hire (Fshoyin, 2000). It hs further been lleged tht locls will demnd bout six times the slry skilled foreign worker would be prepred to ccept nd 'will not work s hrd' (Fshoyin, 2000). Foreign workers from developing countries ccept reltively low slries becuse they cn still ern more thn they could ern in their home countries. Furthermore, the mjority of foreign workers re young mle bchelors nd therefore do not hve fmily to support. For locl workers, however, the high cost of living in United rb Emirtes mkes the level of wges offered by the privte sector incpble of providing n cceptble living stndrd for locl workers (tiyyh, 2003). Second, socil nd culturl perceptions towrds work in the privte sector gretly influence compnies' bility to recruit nd retin qulified locl workers (see Tble 1). In United rb Emirtes, the type of work, sector of employment nd socil interctions t work determine the socil sttus of the worker nd his fmily (Mellhi, 2000). Hence, workers plce gret del of importnce on the effect of their work on their socil recognition. For instnce, most of the jobs in the privte sector re mnul jobs which rb Emirtes society holds in low esteem. Even before the influx of foreign workers, these jobs were llocted to people with low socil sttus nd socil interctions with them were severely restricted. tiyyh (2003) reported tht in rb Emirtes: For youngsters leving school the brriers ginst desirble creer pths re lmost mythicl. They will not ccept jobs s slesmen becuse this does not befit their socil sttus; they will not tke workshop jobs where there is thret of physicl dnger. Low slries re n insultthe rb Emirtesyouth hs too much pride to swllow. The third fctor is discipline nd control. Reserch on the mngement of foreign workers in United rb Emirtes supports the view tht foreign workers re esier to control nd more disciplined thn locl workers (tiyyh, 2003). This could be result of the fct tht work permits in United rb Emirtes re often vlid for one yer nd foreign workers do not qulify for permnent residency or nturlistion, regrdless of the length of their sty, therefore employers hve few obligtions towrds foreign workers who cn be lid off nd sent home t short notice. In ddition, foreign workers hold work permits for specific occuption with specific employer nd therefore they cnnot move freely between employers or sponsor without the consent of their employer or sponsor-Kfeel. Hence, lbour turnover nd job-hopping mong foreign workers do not exist. Tble 1: Comprison between HRM prctices for United rb Emirtes HR nd Non-United rb Emirtes1 Non-United rb Emirtes United rb Emirtes recruitment minly by foreign gent HR deprtment compenstion fixed nd very low negotited HRD very low extensive job hopping very low extensive dministrtive cost high low mngement style uthoritrin pternlistic bsis for control externl, mechnistic, coercive internl, driven normtive bsis for compenstion cost cost nd socio-culturl fctors time horizon short term long term It is worth mentioning tht some unscrupulous privte employers unfirly tret mny foreign workers, especilly the unskilled (tiyyh, 2003). These prctices exist becuse of the bsence of strong regultive pressure nd the low level of enforcebility t the firm level (tiyyh, 2003). lthough dt on how foreign employees del with these prctices is not publicly vilble in United rb Emirtes, Mellhi, nd l-hini, (2000) reported tht in the United rb Emirtes only 2 per cent of foreign workers go to courts to settle their disputes. This is understndble. Most foreign workers re ignornt of the lbour nd residency lws nd regultions, nd fer retlition from employers if they tke ction. The fourth, nd perhps the most importnt, fctor is the inbility to integrte in multi-culturl work environment. Workforce diversity is becoming more nd more importnt issue in United rb Emirtes. Orgniztions in United rb Emirtes employ people from diverse culturl bckgrounds shring different ttitudes, needs, desires, vlues nd work behvior. It is commonly rgued tht workers with diverse culturl bckgrounds should be psychologiclly linked or ttrcted towrds intercting with one nother in pursuit of the firm's objective s this is very importnt. However, this depends on the level of socil integrtion, group cohesiveness nd the bility to work together. This requires workers to get to know one nother, nd replce negtive stereotypes with more ccurte knowledge of ech other s individuls, which reduce prejudice nd conflict nd promote greter group cohesiveness. ccording to published reserch, however, locl workers re often not ble to integrte in the multi-culturl work environment (Mellhi nd l-Hini, 2000; tiyyh, 2003). For instnce, from smple of 8,581 Kuwitis, 60 per cent described their reltionships with foreign workers s being superficil nd limited to officil or business ffirs, nd 40 per cent dmitted tht ntionls tret foreign workers condescendingly (tiyyh, 203). Thus, it becomes less plesnt nd more difficult for diverse workforce nd locls to work together. United rb Emirtes's HRD strtegy: eduction nd voctionl trining United rb Emirtes hs been nd continues to be indequte in developing indigenous supply of skilled nd qulified humn resources. In n ttempt to close the supply-demnd gp in indigenous skilled people, over the yers, United rb Emirtes hs invested hevily in generl nd voctionl eduction. Since the lte 1980s, the Ministry of Eduction, the Ministry of Lbour nd Socil ffirs, the regionl Chmbers of Commerce nd the Generl Orgnistion for Technicl Eduction nd Voctionl Trining (GOTEVT) hve llocted significnt resources to voctionl eduction nd this commitment ppers set to continue for the foreseeble future. The modern structure of the United rb Emirtes n eduction system begn in 1954 with the estblishment of the Ministry of Eduction. There ws little development in the field of eduction in the country prior to the discovery of oil; only smll proportion of the popultion hd ccess to ny form of eduction. Furthermore, eduction ws limited to religious schools teching Islmic lws nd vlues nd bsic litercy skills, nd ws confined to big cities (Tibwi, 1972). However, the lrge finncil surplus from oil revenues in the 1970s nd the erly 1980s enbled the government to invest hevily in both generl nd voctionl eduction. In the Fifth Development Pln (1990-4) the government llocted 19 per cent of its totl expenditure to generl nd voctionl eduction, incresing this proportion to 23 per cent in 1998. s result, United rb Emirtes hs estblished seven universities, eighty-two colleges nd more thn 18,000 primry nd secondry schools. The expnsion of eduction hs resulted in n extensive increse in the student popultion: since the erly 1970s, the number of students hs incresed sixfold nd round 4 million students enrolled in rb Emirtes schools in 1996, However, s illustrted erlier, most jobs in the privte sector require voctionl eduction skills. Thus, detiled exmintion of the voctionl eduction system nd trining in United rb Emirtes provides some insight into current nd future chllenges fcing rb Emirtes firms in terms of shortge nd vilbility of technicl skills. Meeting the demnds of the economy in terms of skilled workers cnnot be ccurtely mesured by the quntity nd qulity of skills cquired, it depends fundmentlly on the extent to which skills cquired re used in employment. Mellhi's (2000) study of voctionl colleges of technology in United rb Emirtes reveled tht over hlf of grdutes in subjects leding to skilled mnul jobs seek office jobs or strt their own trde business rther thn work for n employer s skilled worker. The study found tht the structure of the wge system nd the socil ttitudes towrds voctionl eduction nd voction-bsed jobs re the key impediments to voctionl eduction expnsion nd effectiveness. Students rule themselves out of voctionl-bsed jobs on the grounds of low slry nd low socil sttus. Ntionl culture nd HRM Culture exerts profound influence on HRM prctices. The culturl vlues nd socil ttitudes to mngement nd work in United rb Emirtes re very different from those found in the rest of the world (Yvs nd Ysin, 1999). This perception is the product of socil culturl vlues nd ttributes, some deeply rooted in Middle Estern Islmic nd tribl history nd s well s the oil-boom experience. The mjor contemporry culturl nd socil fetures of United rb Emirtes tht hve influenced the prctices of HRM cn be ttributed to two inter-relted min fctors: the influence of religion, nd the influence of tribl nd fmily trditions. lthough for the purpose of this chpter we differentited between Islmic nd tribl nd fmily vlues in United rb Emirtes, it must be mentioned tht, in relity, it is difficult if not impossible to drw cler distinction between the two. Most tribl nd fmily vlues in United rb Emirtes re product of Islmic techings. The Influence of Religion (Islm) Islmic lws nd vlues influence mngement prctices in United rb Emirtes. Qurnic principles nd prophetic prescriptions serve s guides for mngers in conducting their business ffirs. Islm's influence could be observed in three min res: employment of women, mngement style nd HRM prctices. Despite the high investment in the eduction nd trining of women which resulted in n exponentil increse of women in schools nd universities in United rb Emirtes, the prticiption of women in the forml economic nd socil sectors is still modest. Femle employment nd unemployment re not included in most ntionl sttistics. United rb Emirtes n women's shre of the lbor force is one of the lowest in the world. This is due to the morl nd religious belief mong the vst mjority of people in United rb Emirtes tht mrrige nd child-bering remin the principl objectives for women (Doumto, 1999). In ddition, the high fertility rtes impede women's bility to work. Furthermore, the extreme degree of occuptionl segregtion limits women's chnces to obtin work. Even for the incresing minority of young women, especilly mong university grdutes, whose spirtion extends beyond the home into creer, their options re limited to home economics, eduction nd nursing. For exmple, one report summrized the options open for rb Emirtes women s follow '[rb Emirtes women] will not stnd in production lines in lrge fctories, nd will not work s secretries in compnies nd will not work in service industry s hostesses in eroplnes or sles ssistnts' (l-Iktissd Wl-ml, 1997:60). Mngeril ttitudes nd prctices in United rb Emirtes re shped by Islmic vlues. Islmic vlues nd teching put strong emphsis on obedience to leders. The uthority of the leder or mnger is thus ccepted s right nd proper nd subordintes re expected to show respect nd obedience to superiors. In ddition, hevy emphsis is put on forgiveness, kind-hertedness nd compssion. tiyyh (2003) rgued tht rb nd Islmic vlues emphsise hrmony, co-opertion nd brotherly reltionships. Conflicts should be voided or suppressed. lhbshi nd Ghzli (2004) listed the following s core Islmic mngement vlues: every ct should be ccompnied by intention (niyt); conscientiousness nd knowledge in ll endevours (itqn); proficiency nd efficiency (ihsn); sincerity (ikhls); pssion for excellence (l flh); continuous self-exmintion; forever mindful of the lmighty-piety (tqw); Justice ('dl); truthfulness (mnh); ptience (sbr); modertion; keeping promises; ccountbility; dediction; grtefulness; clenliness; consistency; discipline; nd co-opertion. Islmic prctices lso influence mngement-employees interctions. For instnce, t lest twice dy, Muslim mngers nd workers meet nd pry together side by side regrdless of mngeril positions nd influence. lthough, so fr no empiricl reserch hs been conducted to exmine the effect of such dily interctions, it is fir to rgue tht these interctions could lessen physicl nd psychologicl distnces between mngement nd employees. HRM policies nd prctices in United rb Emirtes Wht individul firms do is strongly relted to the overll nture of the productive system, nd forml nd informl codifictions. Specific HRM policies nd prctices in United rb Emirtes vry ccording to ownership (privte or public), nd type of employees (rb Emirtes or foreign). In the public sector, the HRM model-predominntly concerned with the mngement of rb Emirtes employees nd mngers-is chrcterized by: lifetime employment; seniority wges; nd socil cohesiveness rther thn competence. In the rb Emirtes culturl context outlined bove, tribl ties nd friendship re considered more importnt thn the orgniztion's vitlity. Mngers seek to employ nd promote the mximum number of members of their tribe nd reltives. In ddition, competition for limited work opportunities in the public sector encourges nepotism (wsth) to ply gret role in providing jobs through tribl connections. Consequently, those who re not members of the tribe re less motivted to work hrder nd tribe members my not work s hrd since work is gurnteed nd rewrd is not performnce-bsed. In the privte sector, however, the HRM context is itself evolving nd the rb EmirtesHRM model is still in the erly stge of evolution. The government nd mngement re still looking for innovtive wys to recruit nd mnge the indigenous workforce effectively. So fr, there is no universl greement on the best policies to recruit nd retin qulified rb Emirtesworkers or how to del with the issue of wges inequity in the privte sector. Reflecting the dulistic nture of the lbor mrket, the rb Emirtes privte sector employs two sets of HRM prctices-one for Sudis nd one for foreign workers. lthough the two models differ rdiclly in prctice, both models re not gretly regulted by sttus nd lws: there is no lw regulting mximum working hours, job security, minimum wges, etc. HRM prctices for foreign workers re rooted in the ccounting pproch to HRM, which ims t ensuring tht production ctivities re t ll times efficiently supplied with the necessry input of humn resources. Such resources re essentilly no different from ny other production fctors. HRM prctices focus on tight mngeril control through close direction nd control. Control in this context is more concerned with performnce systems, performnce mngement nd tight control over individul ctivities. Employees re mnged under n instrumentl bsis. The gol of control is to reduce direct lbour costs, or improve efficiency, by enforcing employee complince with specified rules nd procedures nd bsing employee rewrds on some mesurble output criteri. When deling with foreign workers, the HRM deprtment becomes no more thn n dministrtive function deling with viss nd work permits (iqms), termintion nd compenstion. Slries re set individully nd ech employee is treted s n individul rther thn s member of collective entity. However, py scles lso differentite between employees on the bsis of ntionlity (tiyyh, 2003). l-Qssimi (1987) observed tht ntives re pid the highest slries, followed by mericns nd Europens, rbs, Filipinos, Korens nd, t the bottom of the scle, Indin subcontinent ntionls. HRD prctices re non-existent. When new skills re required, it is cheper to cquire new workers rther thn invest in the current ones. In ddition, selection nd recruitment ctivities re outsourced to specilised gencies brod. The bove model of HRM is deeply embedded in rb Emirtes HRM prctices in the privte sector, especilly in smll nd medium-sized compnies. Mngers re finding it hrd to djust their prctices to ccommodte rb Emirtes workers, given the ltter's pprent reluctnce 'to be pssive inputs into the production eqution'. Rther, Sudis would like to be viewed nd treted s 'ssets to be developed nd nurtured by the orgniztion'. HRM hs long been neglected function in the privte sector. The extensive employment of foreign workers reduced the function to some dministrtive tsks nd hiring nd firing. HR mngers hve to lern new skills to motivte, ttrct, develop nd retin highly skilled rb Emirtes workers. bove ll, they hve to move from the control prdigm nd 'mngement by fer of sending you home' to new model better suited to the new workplce relity. Conclusion Much of the debte on globlistion hs centred on the extent to which ntionl socil institutions re cpble of determining politicl nd economic outcomes for popultion in question (Czbn nd Henderson, 1998:585). The reltively fvourble position, t certin historicl moments, of oil producers within globl commodity chins strengthened the cpcity of indigenous institutions in the Gulf Sttes to influence ntionl prctices (ibid.). In the cse of United rb Emirtes , officil policy centred on efforts to dmpen the essentil voltility of primry commodity centred growth regime through diversifiction, nd lrge-scle job cretion within the stte sector. This enterprise ws underpinned by n historic compromise, whereby privte firms gined ccess to stte incentives nd were given free hnd in the resourcing nd utilistion of foreign workers, in return for investment nd limited job cretion for rb Emirtesntionls. This ws underpinned by highly segmented lbour mrket, underwritten by forml nd informl codes of prctice tht plced foreign workers in prticulrly vulnerble position. However, the ttempt t greter stbilistion ws only prtilly successful, in the fce of downturn in oil price in the lte 1980s nd erly 1990s nd high domestic birth rte. This hs led to stte ttempts to reconstitute the lbour mrket into one lrgely composed of rb Emirtesntionls, which, in turn hs forced firms to rethink the mnner in which they mnge their humn resources. The difficulties ssocited with moving wy from low wge model re not to be underestimted, nd, indeed, this hs led to officil ffirmtive ction quots being lrgely flouted. In the end, the vibility of high wge-high productivity lterntive depends on coherent humn resource development inititives, nd by integrting ethnic Sudis more fully into wht will, for the foreseeble future, remin cosmopolitn workplces, nd grdully eroding existing stereotypes regrding n ethnic division of lbour. However, the chllenges my prove insurmountble without fundmentl reconstitution of politicl institutions. Bibliogrphy: 1. Cooper, J. (1996) 'Putting the Kingdom to Work', Middle Est Economic Digest, 40 (14), 55-59. 2. Fshoyin, T. (2000) 'Mngement in fric', in M. Wrner (ed.) Mngement in the Emerging Countries: Regionl Encyclopedi of Business nd Mngement, London: Thomson Business Press, pp. 169-175. 3. tiyyh, H.S. (2003) 'Exptrite cculturtion in rb Gulf Countries', Journl of Mngement Development, 15 (5), 37-47. 4. Mellhi, K. (2000) 'Humn Resource Development through Voctionl Eduction in Gulf Coopertion Countries: The cse of Sudi rbi', Journl of Voctionl Eduction nd Trining, 52 (2), 331-347. 5. Mellhi, K. nd l-hini, S. (2000) 'Locl Workers in Gulf Co-opertion Countries: ssets or Libilities', Middle Estern Studies, 26 (3), 177-191. 6. Tibwi, .L. (1972) Islmic Eduction: Its Trditions nd Moderniztion into the rb Ntionl Systems, London: Luzc nd Compny. 7. Yvs, U. nd Ysin, M.M. (1999) 'Orgnistionl Significnce nd ppliction of Computer Skills: Culturlly-Bsed Empiricl Exmintion', Cross Culturl Mngement, 6 (4), 11-21. 8. Doumto, E.. (1999) 'Women nd Work in United rb Emirtes: How Flexible re Islmic Mrgins', Middle Estern Journl, 53 (4), 568-583. 9. lhbshi, S.O. nd Ghzli, .H. (2004) Islmic Vlues nd Mngement, Kul Lumpur: Institute of Islmic Understnding Mlysi (IKIM). 10. l-Qssimi, K.M. (1987) Mnpower nd Demogrphy in the United rb Emirtes, Beirut: Oueidt Publictions. 11. Czbn, L. nd Henderson, J. (1998) 'Globliztion, Institutionl Hegemony nd Industril Trnsformtion', Economy nd Society, 27 (4), 585-613. Read More