Management of Employee Relation

Posted: November 28th, 2013

CONTENT: OK, as I said to you in class, my main question here is where is the conflict exactly? Who is it between? Remember in employee relations, as you say yourself in the literature review, what we’re looking at is the relationship between employer and employee. Who is the employer and the employee in your case study? And what is the exact conflict between them? I don’t think you yet make this clear and it needs to be explained more clearly. So try to explain this more clearly.

You need to tell us what the source of your case-study is – is it a newspaper article? Then reference the article. Who on earth is ‘Kristina’? What is her role/ job? This is a name which doesn’t make sense to include unless you are quoting from an article and can explain who she is in relation to the issue.

In your literature review you don’t say anything at all about Emiratisation even though the title of your case-study is this. This seems strange. I think it feeds this confusion about what your case is actually about. So I think you need to make this clearer throughout your report.

Otherwise it’s OK – but try to be much clearer about what you’re focusing on here and define the problem more clearly.

Ahmed Comment: I sent him already the guidance and I mentioned to focus on :
First of all, Our topic is about Emiratization in general. But the teacher asked me to be more specific as the topic of Emiratization is huge topic to talk about. I have decided to consecrate on why Private Sector don’t hire the emirate people who are qualified on the same job as the foreigners who does that job. Try to make it as a real problem as conflict.

Thank you,

Management of Employee Relations

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Management of Employee Relations

Case study

Nakheel is among the leading companies in Dubai, which is owned buy the Dubai government. The company has many expert employee and employers as well. However, the UAE government hires national people to work in the public sectors, as well as foreign employees who come with expertise from other areas. However, a problem rose when the CEO of Nakheel realized there were difficulties in hiring Emirate employees in the company, who were only comprised of 5%, and more were leaving the company (Ghazaleh, 2004). In 2008 when the recession hit hard, the company laid most of the foreign workers off. However, this did not solve their problem especially in terms of the laws put across by the government concerning employment for private sectors. However, despite trying to create more employment opportunities for the nationals within the company, very few took the opportunity. It was clear there was no good relationship between the company and the emirate employees. There was an argument that the nationals were not comfortable with the salaries and incentives set by the private sectors, hence a problem of employment would arise. The nationals leaving also complained lack of career progression and long working hours in the private sector.

A research carried out by Emirates National Development in the previous year found that, 60% of United Arabs Emirate nationals gave up their jobs in the private sector. Omar Bamadhaf, an assistant undersecretary of the department of civil service cited that lack of mentoring, career progression and managerial progression was the cause (Ghazaleh, 2004). The private sector has long working hours while the incentives are minimal, providing very little chance for career progression. More so, punishment and appraisal in private sector is common, with more fearing punishments they would receive, especially for the UAE nationals. Company culture was recognized as important especially for the sensitive values of UAE nationals. Many nationals of UAE were more selective of the relations private sector had with their employees. More so, the private sector was interested in making, as much profit as possible, and keeping up with such would bear more costs; hence, they choose to employ foreigners with higher levels of education at cheaper costs than nationals do. This had the repercussion of creating a bad relationship with the nationals employed in the private sector, and many quit their jobs since they were not considered the same way the public jobs considered them. However, despite the need to maximize profits, the private sector has not considered treating their employees with more respect, considering that despite working for longer hours, the remuneration is little compared to public sector (Ghazaleh, 2004).

Literature review

Employee relationship is generally understood to be the relationship between the employer and the employee. The employer depends on the employee for production while the employee relies on the employer for remuneration (Gennar, Judge, & Institute of Personnel and Development, 2005). For there to be good optimal production, there is need to have a healthy relationship between the two parties. When any of the parties has any grievances, it has to be taken care of in order to ensure smooth flow of work in the organization. Employee relations govern who can be employed, terms of contract and ways of termination. It sets the requirements for employment, which different employees at different positions must meet to be employed.

UAE is one of the fastest growing economies and among the most attractive tourist sites. This has drawn many foreigners, many as temporary visitors while others are there for work related purposes. As a result, many foreigners have acquired jobs in UAE, more that the nationals have. This led to increased foreigner securing jobs that the nationals, who only have less than a 5% presentation especially in the private sector. Most importantly, this has contributed to changing employment relations. Employee relationship management has changed from the traditional views to new kids of relationships where people are more involved globally than domestically only.

Currently, several factors can be evidenced in some of the literature concerning employment relations. According to Farnham (2000), there are emerging employment relations concepts, which different from traditional ones. One of them is the focus on global markets unlike in earlier contexts when it was focused on national markets. This calls for seeking competent employee for the firm from foreign countries, to cater for what might not be available locally. This has seen many people working in foreign countries. Another example is more focus service based employment, which is moving from the manufacturing base. In most countries, the service sector is contributing a bigger percentage to the gross domestic products; hence, employment relations have to change to cater for this (Blanpain, & Baker, 2010). For instance, in Dubai, more service jobs such as hotel services, beauty services are in plenty, as opposed to industrial jobs. This has been a result of globalization, where more and more visitors are coming to visit the place. This changes some employment relations such as performance appraisal.

More so, due to global economies, competition has increased, and firms only seek to have the most competent employees, who can deliver competence, raising the bar high especially for the private sector, which has outgrown the public sector, where things change slowly due to bureaucracies. The growth has changed significantly due to such factors, leading to variable growth rate. This has further led to deregulated labor markets, where firms have power to come up with their employment terms, and those who may find the terms unfavorable may not accept them (Gunnigle, Morley & Kelly, 2002). For instance, the Emirate nationals are refraining from private sector jobs because of their employment terms, which they feel are not favorable at all.

Employment relations have changed over time, with both employers and employees playing a crucial part in determining its future. Previously or in the traditional relations, employment relations were determined by the employers where employees had a little say within the organization, and did what was asked of them. Today, when employees raise their grievances, the organization has to listen. Employees have become the most valuable asset in any organization; hence, the organization has to ensure a good relationship with them to avoid problems (Suliman & Al-Shaikh, 2007).

In the UAE, there has been a problem between the national employees and the private sector. The problem arises from the working conditions, incentives and the salaries as well as organizational culture. Most of the private companies are using westernized organizational culture to compete globally, which many of the nationals have not adopted yet. These differences have led to many nationals leaving private sector jobs. The management of private companies such as Nakheel has not taken time to consider what the nationals need to work in their companies, especially in terms of the organizational culture. On the other hand, the nationals have taken more time than necessary to realize that their nation’s economy is dependent on the global market, and having many visitors, means mixing of cultures, hence they should embrace the culture necessary for a global organizational culture. It is clear that there is no good relationship between the nationals employed in private sector and the employers.

Analysis

In Nakheel, several factors have led to this situation, with the major issue revolving around salaries and values held by UAE nationals, concurrently raising other issues. Currently, majority of the private sector has employed more foreign workers than nationals, considering with their aim of profit maximizations foreigners provide a better chance since they are cheaper than nationals are. In comparison to the government sector, the private sector in overall has only an emiritisation of 5%, while the government has over 50%, making it impossible for the government to employ more nationals. Hence, many UAE nationals are ending up jobless even after graduating from universities and colleges. This has raised concern, which has driven the government to implement laws requiring more Emiratis to be employed in the private sectors such as Nakheel among others. However, replacing of foreigners with nationals for Nakheel is not possible without better education systems to provide more nationals that are qualified.

The main reason has been the demands of the UAE nationals, which the private sector may not be in a position to offer. The government is willing to offer the nationals the kind of salaries they want, working conditions, and even better career opportunities, which would mean increase costs for the private sector, ending up in little or hardly any profits. Hence, without a level playfield where the government subsidizes salaries for the nationals, Nakheel will not be in a position to employ the nationals. The government has many resources from revenues of oil, making it possible for it to afford netter salaries and incentives for their workers than the private sector can do. If the private sector is to compete profitably with the government institutions, they have to look for other cheaper means of labor, which can be imported. Hence, the government contributes to a big extent to the situation, y offering its employee bigger salaries than private sector can offer by far, leading to a bigger gap that contributes to the nationals opting to stay jobless than work for private sectors. Nakheel is also in the same situation, where the costs of employing nationals is quite high for them, and prefer foreign workers especially after considering they have a huge debt to pay. Importing cheap labor provides a chance for the company to save some of the costs that could have gone to the nationals.

More so, Nakheel together with other private sectors feel that nationals are not qualified for the jobs they can offer due to lack of a better education systems that are designed to offer diversity in careers. Many nationals opt to take humanities instead of sciences, which are more required in the growing economy. Nakheel needs more students to take up sciences considering majority of their work except administration will require engineers and technicians. This leads to further import of labor by Nakheel. Nakheel has offered many contract to foreign companied since they feel locals may not be competent enough to carryout such jobs, especially in the construction of high-rise building. More so, considering that most of the nationals prefer taking humanities in schools, there are a limited number of them available for such a job, and further considering the private employers do not have full confidence in the education system.

It is obvious that the government has taken measures to solve this problem, but progress is minimal. The government has set up laws requiring the private sector to employ a certain percent of nationals in their firms. However, other reasons such as their salary demands, working conditions and qualifications has slowed this process, since there is no level playfield between the government and the private sector. The government is in the process of improving the education system to offer more diversity in careers to encourage more students to take up different careers that qualify them for the private sector. On the other hand, the private sector has also contributed to the nationals having a negative attitude to the jobs they offer. It is understandable that the private sector aims at maximizing profits, but they should also consider the welfare of the people. Some of the reasons the nationals recent private sector jobs is long working hours and low salaries, and too much work. The private sector should be aiming at making their working conditions better.

Recommendation

To solve this problem, the government need not only implement laws requiring private sector to employ a certain percentage of nationals in their firms, but also, give incentives to the salaries of the nationals to the private sectors. The incentives can be through government pensions for the working in order to encourage the nationals to take up jobs in the private sector. This will provide a level playfield. For as long as private sector cannot afford high salaries and incentives that are offered by the government, emiritisation will continue to progress slowly or even stop progressing despite the government efforts. It is impractical to make huge costs just for the sake of employing nationals, which will mean sacrificing a big part of the profit, while there is a cheaper solution, with more competence in the job. Therefore, the government will need to cater for the extra incentives that nationals want to receive in order to lure them to the private sector.

Another solution to the problem is improving the education systems to impart the nationals with the best skills to compete with the foreign workers. Without competitive qualifications, the nationals will not have better chances of winning jobs against the more qualified foreigners. Many of the private sector executives lack confidence in the education system of the UAE. To acquire the high profile jobs in the market, the nationals will need to have highly qualified skills, considering it will be no use to impose the emiritisation issue to the private sector if at all the nationals cannot provide the same competence foreigners can offer, more so at a cheaper price. The government will need to come up with a strategy that improves the skills of the nationals to meet the demand of the private sector as well as the whole market. Moreover, the private sector will need to improve its working conditions and salaries. The whole effort should not be left to the government. On the other hand, the nationals need to come of their attitude towards private sector jobs, and compete for all available position.

References

Blanpain, R., & Baker, J. (2010). Comparative labor law and industrial relations in industrialized market economies. Alphen aan den Rijn Pays-Bas: Wolters Kluwer Law & Business.

Farnham, D., & Institute of Personnel and Development. (2000). Employee relations in context. London: Institute of Personnel and Development.

Gennard, J., Judge, G., & Institute of Personnel and Development. (2005). Employee relations. London: Institute of Personnel and Development.

Gunnigle, P., Morley, M., & Kelly, J. (2002). Employee relations. Bradford, England: Emerald Group Pub, 24 (4).

Suliman, A. M., & Al-Shaikh, F. N. (2007) Emotional intelligence at work: links to conflict and innovation. Employee Relations. 29 (2), 208 – 220