Statement of Common Understanding

Fair, transparent and consistent principles, procedures and processes are a pre-requisite for this and should be applied in managing the workforce. Every effort should also be made to build upon and develop workers’ competencies and skills. The work environment should offer open and effective communication channels at all levels of the enterprise and between levels. Sound human resource policy should be responsive to the interests of all employees and the development of their careers.

Sound HRM policy and practice also involve:

1. cooperative labour management relations;
2. education and training integrated with enterprise systems of knowledge and technology;
3. motivation and incentives based on equitable reward systems and schemes;
4. safeguarding employee health and working conditions.

A major challenge is the need for new or upgraded management and union skills so that both may adapt effectively and jointly to emerging trends in the external environment of the enterprise. The enhancement of these skills needs to take place through improved communications, training and career development. A strong commitment also needs to be developed by the private sector to implementing sound HRM policies. Where present, trade unions resistance to change should be addressed constructively. Resistance to change and inflexible attitudes are problematic whether on the part of employers or unions. Government, for its part, should make greater and more effective efforts to provide assistance and create a facilitating environment for HRM policies by implementing improved legislative or regulatory frameworks for the development of sound HRM practice.

More specific problems and challenges to HRM include the following:

1. a fair and constructive management of human resources and enterprise adjustments including retrenchments and redundancies where necessary, through improved consultations and participation;
2. the creation of mechanisms that foster employees involvement where appropriate;
3. better addressing the job security needs of employees particularly in relation to sub-contracting and informalization;
4. developing the potential of human resources under a reinforced partnership between management, employees and unions;
5. stepping up efforts and programmes to help employees attain a better appreciation of corporate goals and such problems as cost pressures;
6. dealing more effectively with the larger workers’ issues concerning health, safety and levels of pay;
7. providing training and upgrading skills on a continuing basis; and
8. coping with shortages of skilled labour.

To enhance human resources management at the enterprise level the ILO’s constituents may wish to act as follows:

1. Governments should find more effective means of bringing enterprises and trade unions together to achieve the necessary competitive edge;
2. Governments can also contribute to a more flexible and adaptable educational and training system able to turn out more competent people with market-oriented skills;
3. Governments should provide or improve social security and social safety nets;
4. Effective life-long learning schemes that view education and training as necessities rather than luxuries should be developed.

Mutual trust could be further enhanced by implementing the rights spelled out in the ILO’s Declaration on fundamental principles and rights at work. HRM-related instruments could be applied and international "best practices" in HRM could be benchmarked and promoted.

Employers, workers and government should work closely together to create a strong economic environment in which competitive enterprises may flourish and enterprise adjustments be better managed. All social partners should work to build an environment conducive to sound HRM through management training and workers’ education and training.

Under the principle of "voluntarity" all corporate citizenship practices must be subscribed to as a matter of choice. The relevant organizing principles are compliance, conscience and competitiveness. Compliance with legal obligations (such as labour laws and environmental requirements) as a threshold standard for good corporate citizenship practice. Philanthropic and ethical principles may offer motivation to go further. Competitive strategies may also give a significant role to corporate citizenship practices.

Good corporate citizenship practice must be a continuing effort insulated from changes in economic conditions and management. It should be an effort that involves, whenever possible, all levels of the organization.

Corporate citizenship programmes must not discriminate against anyone on grounds of race, creed, culture, religion, gender, disability, etc.

Disadvantaged groups may be an important target for corporate citizenship programmes. But their needs may be met more successfully by government social welfare programmes.

To encourage good corporate citizenship practice it will be useful to:

1. Acknowledge successful corporate citizenship initiatives and promote them as role models;
2. Tap the media to spread relevant information and raise awareness;
3. Establish mechanisms to share information about successful and unsuccessful experiences;
4. Promote voluntary codes of conduct.

Governments, employers and workers may contribute in the following ways:

Governments

1. Providing fiscal and other incentives;
2. Making awards, etc. for outstanding achievement;
3. Promoting regular dialogue between those involved in corporate citizenship practices;
4. Raising awareness through the use of media, public relations campaigns and other public information activities.

Employers

1. Promoting corporate citizenship practices among their members;
2. Promoting shareholder understanding of corporate citizenship issues;
3. Encouraging transparency and visible corporate citizenship practices, to which reference could be made in mission statements.

Workers

1. Taking part in corporate citizenship initiatives;
2. Supporting corporate citizenship programmes, including workers’ education.

Appropriate policies, regulatory environments and programmes for tapping the employment potential of small businesses involve the following:

1. Fiscal and monetary policies sensitive to the needs of small businesses;
2. Wider access to credit facilities;
3. Tax concessions for small businesses;
4. Simplified regulations and procedures requiring less paperwork;
5. Support services (e.g. technology, training, development information, marketing and promotional guidance, etc.)
6. One-stop service centers for registration and licensing;
7. Fostering partnerships between large and small businesses;
8. Better infrastructure;
9. Improved access to IT capacity;
10. Greater public-procurement opportunities;
11. Compliance with basic labour standards.

Cross-cutting issues of job quality and gender to be addressed in promoting small businesses are as follows:

Job Quality

1) Occupational safety and health;

2) Awareness/education programmes for owners, managers and workers;

3) Broader information and training.

Gender

1. Equal access for women to training, credit facilities, etc.;
2. Equal pay for work of equal value;
3. Gender awareness training and promotional campaigns;
4. Promoting employment opportunities for women;
5. Childcare assistance;
6. Gender-sensitive entrepreneurship development programmes.

Recommended institutional mechanisms for promoting the employment potential of small business include the following:

Constituents

1. Compiling and disseminating relevant information;
2. Developing representative associations to assist small businesses
3. Associating social partners in collaborative efforts to develop small business and suitable employment policies.

ILO

1. Broadening entrepreneurship development activities.

Updated by TN. Approved by BW. Last update: 31 May 2000.

International Labour Organization (ILO): Contact us | Site map |

Copyright and Permissions 1996-2008 International Labour Organization (ILO) - Disclaimer