Airline Union Calls For Minimum Wage Disclosure

Bernama reports that members of the Malaysian Airline System Employees Union (MASEU) have called on all government linked companies (GLCs) to disclose their minimum wage rate. Read more

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Proton Malaysia Assembly Line Workers Among Lowest Paid

Proton Malaysia’s assembly-line workers are among the lowest paid in the nation, according to the Malaysian Trades Union Congress (MTUC). Read more

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Human Capital: The Challenges Facing Asia

Courtesy of INSEAD Knowledge

by Kevin Tan, Singapore

While the economic downturn is a key focus for many C-level executives, the need to attract and retain talent remains an important issue. This is all the more so in Asia where developing countries such as China and India are helping to drive the world’s economic recovery.

Narayan Pant

Narayan Pant, Affiliate Professor of Strategy and former Dean of Executive Education at INSEAD, believes that companies are already thinking about their human capital needs for when economies pick up. “So the question for many was, if you have excess people now, could you find a way to hold on to them so that you would have them available when the economy starts looking back up? I think this was an important focus for many organisations.”

At this year’s Singapore Human Capital Summit where Pant was a facilitator, participants were told that companies have to engage their employees by recognising their different needs and aspirations, and address these accordingly. “The way to engage people is to figure out what creates value for them – recognition, opportunities for personal development, opportunities for travel, work-life balance or other dimensions, in addition to compensation,” says Pant. “Understanding what dimensions of value are relevant for different groups of employees and tailoring solutions that work for different groups, is one way to keep employees engaged.”

However companies in Asia are not doing enough to recognise the diversity in employee needs and segment employees appropriately, says Pant. Encouragingly, some large companies are clearly experimenting with this, he says.

Harish Manwani

Pant also notes that companies are trying to attract talent by using corporate social responsibility (CSR) initiatives. Notably, Harish Manwani, Unilever’s President for Asia, Africa, Central and Eastern Europe, championed the idea of ‘doing well by doing good’ at the conference. Pant believes, however, that to be sustainable, CSR initiatives need to make a business case, otherwise they will be yet another fad of good times.

“So if it makes people feel good to be part of an organisation that seems to care, then offering employees CSR opportunities is one way to improve commitment and productivity. This could, in turn, have beneficial business effects,” explains Pant.

“Saying that CSR results in better employee engagement numbers makes less of a dollars and cents case, but it can make sense. Higher engagement results in lower turnover and better on the job performance, which builds a potential business case for CSR.”

Sunny Verghese

Also at the conference, Sunny Verghese, Chief Executive of commodities trading firm Olam International, said that in his view CSR initiatives are only tenable if they help sustain profitable growth. As a concerned shareholder himself, Verghese is interested in engaging in CSR initiatives that have two features – they enhance business growth and they fall in an area the company knows something about. And so Verghese says Olam does not get involved in HIV/AIDS programmes, even though HIV and AIDS affect many farmers in areas where they do business. Instead Verghese seeks to use Olam’s expertise in farming to help farmers achieve better crop returns, which in turn benefits Olam, says Pant.

At the conference, Unilever’s Manwani also argued that companies should think locally and act globally, which Pant agrees with. Manwani’s point, says Pant, is that any individual is a local customer, meaning that the act of purchasing always happens in a local context. However, companies can enjoy a competitive advantage at the local point of sale by leveraging their global reach and strength.

“Thinking about the challenge in this way could empower employees to engage with local customers in ways that create value for them while leveraging the advantage of a global organisation,” argues Pant. “Manwani perceives this to be much more sustainable than the other way, which is trying to offer global solutions to people who are local customers.”

Asian Human Capital Award 2009 Accenture India triumphed in a ‘close fight’ for the inaugural Asian Human Capital Award, fending off 43 competing entries from seven countries across the region. Speaking to INSEAD Knowledge, Narayan Pant, who was a member of the judging panel, said: “The thing about Accenture India that caught my attention was how their mentor-mentee relationship worked. I thought it was quite powerful, and they had teeth to it.” “Both mentors and mentees got evaluated on how they did in this relationship. But the crucial aspect to that was that relationship was designed to enable the mentee, or the person that was being mentored, to achieve his or her developmental goals.” “Those developmental goals, those personal aspirations were at the centre of the mentoring relationship which to me was very powerful, so it wasn’t about how we get you to be a better cog in the organisational system, it was much more about what do you want and how can we help you get it?”

Pant adds that, semantics aside, companies often fail to empower their client-servicing employees with the tools to deliver value to customers. Sales forces of multinational corporations often complain that they have to follow global and possibly misaligned marketing approaches for their local clients. A quick win would be to work more seriously on adapting sales tools and approaches to the local context.

“If you give a person the ability to adapt solutions to local needs, you make them feel good, you make them feel powerful, you excite and energise them.”

Asked about an assertion at the conference by Hsieh Fu Hua, the Chief Executive of the Singapore Exchange, that leadership has to be shared in companies, Pant says that companies in Asia are adopting this idea. But he notes that Asians believe the myth that the boss makes all the decisions and that all decisions are made before meetings, which are used only to rubber-stamp decisions.

However the myth is just that, says Pant, as Asia often practises ‘leadership by walking the corridors’. “The boss has actually come to a decision by walking the corridors a month before the meeting, making sure that he or she understands what everybody’s thinking.”

“So by the time he comes to the meeting, he’s already tried and tested a couple of trial balloons behind the scenes with several key stakeholder groups.”

“I think there is a great weight given to community and harmony in Asia. This co-exists almost paradoxically with an external impression of great power distance and strong hierarchical organisations. The way these are reconciled are quite unique and can be seen in leadership practices that are less visible to the casual observer.”

Hsieh Fu Hua

At the conference, Hsieh was asked how companies should manage the paradox of driving change while maintaining a sense of stability for employees. Hsieh replied that companies should foster evolutionary change, anchored to the values and culture that are shared by employees.

On this issue, Pant agrees that it is important for companies to manage change while fostering a sense of stability among employees. But he notes that organisations can make incremental changes for quite a while, until the need for dramatic changes (such as changing leadership teams and organisational structure) becomes over-powering. This has been described in the organisational literature as long periods of evolutionary change, punctuated by bursts of revolutionary change.

Pant adds that the current generation of managers is possibly more receptive to the idea of continuous change than previous generations who tracked their progress by the office spaces they occupied in their careers. Pant says he doesn’t think employees expect organisations to remain the same because they don’t expect environments will remain the same.

On the key lessons gleaned from the conference, Pant says the idea that companies shouldn’t treat employees as if they are all the same, is becoming popular as there is a growing emphasis on the need to segment employees carefully and create varied engagement strategies for diverse segments.

Companies also learned that leveraging global workforces meant empowering them to think local, while gaining access to the benefits of being part of a global organisation, says Pant. Gaining tangible benefits from this will require companies to get the logistics right that enable these employees around the world to work with each other.

But the biggest lesson, says Pant, is that no guru anywhere has the answers to the specific issues and challenges that Asia will face in the future. It is up to those who work in Asia to experiment, innovate and find the best solutions that work for them.

INSEAD was an academic partner of the Singapore Human Capital Summit, which was held on September 29-30, 2009.

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Najib Tun Razak’s First Take on CSR

Newly minted Prime Minister of Malaysia, Mr. Najib Tun Razak, has asked employers to make full use of tax incentives at their office. Prime Minister Najib was reported to have said:

I would like to urge the private sector to fulfill their corporate social responsibility by providing childcare facilities at the workplace for their employees.

According to reports, employers who set up childcare centres were given 10% tax reduction per annum on the cost of setting them up for a period of 10 years. Meanwhile, government agencies offering childcare centres at the workplace would be given a RM80,000 grant to create the facility.

Prime Minister Najib was said to have made these statements at the launch of the International Early Childcare and Education Conference. As a start, his statement is at least one step forward in enhancing more awareness in employers on their corporate social responsibility (CSR) towards their workers. However, in the wide sphere of CSR, this is just a baby step.

Since Mr. Najib begun his premiership, environmental issues have cropped up in East Malaysia. The approval of a 40MW coal-fired plant in Sipitang in Sabah was reported to have drawn the ire of green activists. The approval by the Department of the Environment (DOE) for the plant, which is said to be helmed by Sabah Forest Industries Sdn Bhd  (SFI), is reported to have been done without any discussion with stakeholders. President of Sabah Environmental Protection Association (Sepa), Wong Tack, disputes the DOE claim that there was NGO participation by way of the Environmental Action Committee (EAC). Furthermore, the EAC is apparently not a NGO, but an informal forum for the state Ministry of Tourism, Culture and Environment.

In addition, the Sun newspaper has reported recently that effluent and sludge from a water treatment plant in Bukit Badong have been found in drains flowing directly into Sungai Selangor, the very river from which it draws water to be treated! Puncak Niaga Sdn Bhd (PNSB), the builder, operator and manager of the treatment plant, has been instructed by the DOE to stop the flow of sludge into the drains.

The sludge that PNSB allegedly emits is is categorised as scheduled waste SW204, waste which contains heavy metals and chemicals. SW205 waste must be disposed of in accordance with World Health Organisation and health standards. As far as CSR goes, PNSB certainly could do better. What is Mr. Najib’s stance on this?

Much more can be done in Malaysia, in terms of CSR. It’s not a matter of going beyond compliance, it’s a matter of plain old compliance. With the new system of Key Performance Indicators (KPI) for cabinet ministers implemented by Mr. Najib,  one can hope that the country’s businesses will be steered towards performing well whilst doing good.

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Workers Want Trustworthiness

By Daniel Chandranayagam

Reproduced with kind permission

Being interested in the new management field of corporate social responsibility (CSR), I asked a friend recently why there appears to be more CSR consultancies opening in Singapore than Malaysia. He answered, without even thinking, “Because businesses here aren’t really interested.”

This might explain why only five participants were present at the “Integrity at Work” forum, organised by the MCA Integrity Watch Group in January.

This leads me to wonder if employers actually care about what their employees want, especially those workers whom employers really want to keep. Of course, some employers might think that giving their employees a job, especially with thousands reported to be laid off almost every week, is a benefit in itself. Yet, those good workers – the type who have the work ethic, qualifications, skill and experience any employer would want – would be the ones to know that now is the best time to jump ship.

Edelman’s South East Asia managing director, Robert Grove, said at the CSR Global Summit 2009 in Singapore that a survey found that 50% of workers would not want to work for an employer they do not trust.

Of course, basic trust means an employer has to go beyond compliance. In this sense, the 124 employers fined by the Employees’ Provident Fund for failing to submit their workers’ contributions, and the employers involved in the 147 civil cases and 1,550 criminal cases against errant employers in the last quarter of 2008, fall far below the expectations of fifty per cent of the workforce (if not more). Read more

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Corporations, Education and People Living With Disabilities

By James TS Chua

It was with much expectation that I attended the public forum on the Persons with Disabilities Act 2008 at the Malaysian Bar Council on 17th January 2009. People with various disabilities (PWDs) were to converge and discuss pertinent issues they face. I believed that this would be an extraordinarily positive step toward social inclusion of PWDs.

However, after the conclusion of the forum, I felt somewhat shortchanged. The Act in its entirety is not satisfactory and there is definitely more room for improvement in the Act. I thought perhaps corporations could help with these issues, but no corporations were present at the forum.

That is a shame, as the companies missed an opportunity to look into an area ripe for CSR involvement.

Education has long been a priority of nation-building in Malaysia.  Nonetheless, a parent shared that she had tried every means of enrolling her Down Syndrome daughter in all the available schools (both general and special) in vain, either because the teachers were not passionate about teaching or not serious in caring for disabled children. Read more

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Work It!

A Closer Look At Employers’ CSR Duties

Of the four dimensions, public listed companies had the best score for CSR at the workplace in the Bursa Malaysia’s “Corporate Social Responsibility in Malaysia 2007 Status Report“. The Bursa Malaysia’s CSR Framework, published in 2006, listed the following priorities under the workplace dimension:

• Employee Involvement
• Workplace Diversity
• Gender Issues
• Human Capital Development
• Quality of Life
• Labour Rights
• Human Rights
• Health & Safety

The CSR Digest conducted an email interview with Human Resources Management (HRM) guru, Maimunah Aminuddin. Puan Maimunah served in Universiti Teknologi  Mara (UiTM) for 34 years. She began her career in Malaysia teaching industrial relations at UiTM, then later became one of Malaysia’s leaders in HRM. Her book, “Malaysian Industrial Relations and Employment Law”, 6th edition, is McGraw Hill’s best-seller in the category of books written by local authors.

Puan Maimunah recently authored Human Resource Management, published by Oxford University Publications, the first book in English on HRM specifically written for the Malaysian market. Read more

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