The evolving people contract in companies

The evolving people contract in companies

By Darryl Hadaway

JAKARTA (JP): Over the last three years, organizations have
begun to undergo changes in order to alter their relationships
with not just employees, but "people".

This change will predominantly affect the relationship between
management, the people they manage, as well as the people who
have come together as a community to create value.

Indonesia has progressed tremendously since 1998 in the
treatment of its people and this is not just in a political sense
but in the day-to-day openness of communication in newspapers,
through labor movements and in the way people work.

This change, however, has already impacted the economics and
investor confidence in several well-publicized industrial
disputes (resulting in multi-million dollar losses) and is
placing the reputation of the country, as a place of investment,
at serious risk.

To improve the economic challenges that lie ahead for
Indonesia, it is critical that the current industrial situation
changes immediately, with greater dialogue and investment. All
sides of the table need to look not only at today's issues, but
at the root causes and to take personal responsibility for action
in their own areas.

Let us take a look at the people at the table, the company,
represented by people called management, the people themselves,
who are now in many cases being represented by another party, the
unions, and another player, the rule maker or arbitrator in the
relationship... government.

The company. The company's desire is to manage a fair return
for all stakeholders. Historically, the prioritized stakeholders
have been seen as the shareholders.

Systems were established that lessened the opportunity for the
employees to have a say or take action as a community if
something was not perceived as fair.

Fairness also meant management rights given the relatively
one-sided labor regime and lack of information provided to
employees. Pressure on the management team was also intense as
they responded to shareholder needs of global competitiveness;
faster, better, cheaper. The employees largely did what they were
told with few rights, creating a system of compliance.

The end outcome here has been inappropriate people systems,
one not built on a mutual sense of responsibility but compliance.
Historically, these systems drove administrative excellence but
lacked the need, or desire, in most cases for anything more.

Companies have a role to start afresh. People systems need to
develop to build communities of educated, loyal and inspired
workforces. This involves starting to understand strategy, the
alignment of the right people in the organization, who share the
same vision and values.

Organizations like Apindo will need to take a step forward in
this respect.The person. The person for so long has been asked to
be compliant. It is only natural in today's Indonesia that the
level of curiosity has risen dramatically. They are asking
questions, the why's, why is my pay x? Why is promotion the way
it is? Why do you hire people from outside and are not training
me? Why is the company losing money?

The only savior for management today are tough market
conditions where people's choices are at best limited. But, the
best employers will always attract the best people.

So what is deemed fair here? First, from the people's side.
The reality is that as companies try to identify core skills and
values, a number will not share the same vision, dream or have
the appropriate competencies or want to work in such a defined
culture.

The union. The union was created out of the need for people to
come together under a sense of and promotion of fairness. Many
companies do not have unions by employee choice, out of respect
of the fairness given to them by leadership and key stakeholders.

Others, by sheer size and distance of feeling from decision-
making, use such mechanisms as ways of bringing employees
together as effectively managing two-way communication and in
order to share a feeling of involvement.

The union needs, however, to be accountable and be responsible
for it's actions, just like leadership in an enterprise. A system
of resolution needs to be created, whereby the costs of
inappropriate actions is the same no matter which party is making
unreasonable claims.

If asked to pay the bill due to inappropriate action, a system
that allows for speedy dialogue and resolution of the issues of
concern is absolutely essential. We trust that the dispute
resolution laws currently being debated are put in place quickly
and that an appropriate degree of accountability is placed on
unions as they are with companies.

Government. The government is the arbitrator in this process.
It provides a very important role in providing a platform of
policy and providing research that backs up both legal and
dispute resolution processes.

Government is in a state of reform and one area it will be
judged on in economic circles is its ability to provide clarity
on direction. Policies must be formulated alongside the creation
of a process of openness in decision-making, logic and precedence
in the law courts. Recently it has been slow and seen as
reactionary. It will be essential as a view is taken on policy,
through responsible public debate so that issues are then
challenged not on the streets, but in the courts on the basic
laws.

It will not be an easy journey but one we must go through.
This transformation in many countries took decades. Expectations
are high from all sides but we must create and believe in the
dream and commence the journey. Each party must learn to start
with themselves and to take active steps, today.

The writer is Partner Advisor of Andersen and head of the
Amcham Human Resources Committee in Indonesia.
Note: This paper consists of personal views and cannot be
construed to be the views of either Andersen or Amcham,
Indonesia.