Tripartism of Industrial Relations in Singapore

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Introduction

Singapore developed the tripartite model to guide industrial relations and human resource management approaches. The model has facilitated the resolution of many adversaries and confrontations in human resource problems in the nation since 1960. Fair Employment Practices (2007) says that the labour sector has been dominated by confrontations akin to political instabilities, high unemployment levels, frequent labour strikes, and incidents of social unrest. After independence in 1965, Singapore’s key challenges in industrial relations involved sustenance and attraction of foreign investments in an effort to ensure job creation and/or realise sustained economic growth. In response to this challenges, various social partners came together to derive strategies for transforming the confrontational approaches in labour relations to peaceful approaches to mitigate economic costs of labour strikes. Consequently, the tripartite model was developed. The model balances employer corporate goals, worker aspirations, and the government’s desire for long-term prosperity and stability. This paper identifies the parties, which are involved in the model. The goal is to discuss how they have helped to make the model work over the years.

Literature Review

The body of industrial relations focuses on resolving conflicts that arise between employees and an employer, whether an organisation or a state, through a requisite professional recruitment and placement body from a specific industry. Within an organisation, the human resource department handles issues that relate to employees, including enhancing motivation. The noble functions of the HR department are inspired by the perceptions that people who work for an organisation or a state agency act as the source of competitive advantage by noting that they cannot be optimised using economic theories in a manner that is similar to other factors of production such as capital and land (Ollapally & Bhatnagar 2009). Different nations adopt different frameworks for handling employee issues.

Singapore adopted the tripartite model. What value does any human resource management model have on a nation or an organisation? There is a growing body of literature that discusses the importance and value of effective management of human resources within organisations. Various organisations deploy dramatic changes in the human resources management, including the incorporation of IT into their HR management. Jackson, Hitt, and DeNisi (2003, p. 78) assert that such changes, ‘have created a growing consensus that effective human capital management is critical to an organisation’s success’. Therefore, it intrigues one to think about how management of human capital should be conducted with particular concerns on how the HR should function in relation to human capital management and the manner in which management of HR should be conducted if it has to add value to the human capital in a nation.

Bowles and Gintis (2005) confirm that effective management of a nation’s human capital resources occurs when the HR is incorporated in the development of human capital management strategies. The HR has a momentous role to assume during strategy formulation ‘by making explicit the human capital resources that are required to support various strategies and strategic initiatives for human capital management’ (Brockbank 2009, p.348). Thus, it is important to note that human capital management does not only focus on rewards, job allocation, and remuneration. It also includes programmes for adding value to human capital such as strategic decision-incorporating mentorship programmes and project structures within HR. Such programmes are incorporated in Singapore’s tripartite model.

Erskine (2012) asserts that lack of collaboration by various partners in the implementation of human capital management strategies may disadvantage an organisation or a state agency in terms of increasing of labour costs. Labour costs include direct and indirect costs. Labour conflicts cause turnover and a reduction in employee productivity (Crook et al. 2011). For example, poor employee performance means low output levels, which imply high operational costs. Time that is wasted in strikes translates into reduced production or service delivery to the citizenry in case of public sector agencies (Armstrong 2006; Leopold & Harris 2009). In the same line of thought, Jackson, Hitt, and DeNisi (2003) reckon that HR plays the role of enabling an organisation to achieve its business strategy. Organisations and government agencies achieve business strategies through staffing, human capital recruitment, and development of individuals through mentorship and the creation of the right project structures.

The above mechanisms are tied to the discipline of HR and industrial relations. The discourse provides a plausible opportunity to create value for human capital (Sveiby 2007). The underlining claim here is that any successful capital management endeavour cannot be achieved without the collaboration and participation of all organs or partners in industrial relations. A tested model for human resource management also serves as a guideline for any human resource approach that a given state agency or an organisation adopts. As it will be revealed in later sections, the tripartite model was developed consistently with the existing literature on the value of effective management of human resources to mitigate the challenges of confrontational industrial relations.

In the analysis of Singapore’s’ tripartite model, it is important to establish scholarly recommended best practices in managing industrial relations problems. Industrial relations scholars claim that mentoring involves a crucial professional development strategy of immense influence in both private and public sector. For example, Young and Perrewé (2004, p. 113) say that mentoring constitutes ‘a formal or informal relationship between two people-a senior mentor (usually outside the protégé’s chain of supervision) and a junior protégé’. Success of mentoring programmes requires the input of various partners in industrial relations. Many valid reasons prompt organisations to incorporate mentoring programmes in their human capital management approaches. These reasons range from increasing workforce morale to raise productivity levels to fostering upward career mobility (Smith, Howard, & Harrington 2005). A careful scrutiny of these reasons reveals that many of them cut across the areas of HR approaches and interests. The aspects are incorporated in the Singapore’s tripartite model. Therefore, as discussed in the next section, the model constitutes a tool for managing human resources as discussed in different scholarly researches on the best practices in human resource management to mitigate the cost of poor human capital management in state agencies, corporations, or profit and non-profit-making organisations.

Singapore’s Tripartite Model

Tripartism is a source of competitive advantage in Singapore. It drives economic competitive advantage, ensures harmony in labour relations, and/or helps in promoting Singapore’s collective progress. The model brings together various industrial relations parties to address issues of employment establishment, increasing the sequestration age, facilitating education to improve and grow skills, workforce promotion, promoting fair practices in the service sector, and creating elastic salaries and wage systems (International Labour Office 2010, p.5). The Ministry of Power aims at developing a worldwide competitive advantage by increasing the level of competitiveness for Singapore’s workforce and ensuring great and satisfactory workplaces. The ministry anticipates that this strategy will raise the level of societal cohesiveness whilst increasing economic gains of all Singaporeans (International Labour Office 2010).

Singapore’s tripartite model establishes the foundation for developing the great tripartism that is founded on principles of trust and understanding by three main bodies that make the elements of the model. The principles of trust and understanding translate into the formation of different task forces with the objective of ensuring amicable mechanisms for addressing industrial relations in Singapore. At the same time, the forces recommend the implementation process to facilitate the development of positive alterations to the nation’s industrial relations policies and practices (International Labour Office 2010, p.8). Partners or parties to Singapore’s tripartite model comprise Singapore National Employment Federations (SNEF), National Trades Union Congress (NTUC), and Ministry of Manpower.

Through the tripartite frameworks that range from tripartite and task forces, tripartite guidelines and advisories, tripartism forum, and the committee on economic strategies, tripartite partners have developed the capacity to adopt various measures for addressing crucial issues in the employment sector and industrial relations. Singapore Tripartism Forum (STF) plays the role of lengthening, reinforcing, and intensifying the power of tripartism via different well-thought-out mechanisms. It puts in place various platforms to facilitate the identification of key concerns and issues by tripartite partners to foster effective response towards the shared common challenges. Such challenges involve the re-creation of employment opportunities, re-employing of old people, workforce skills upgrading, putting in place strategies for fostering fair and equitable employment practices, and ensuring flexibility on the current salaries and wage systems.

In 2009, Singapore established the Economic Strategies Committee (ESC). Up to date, the committee ensures social partnership representation in addressing industrial relations issues. In 2010, ESC developed recommendations for facilitating economic growth with the objective of creating opportunities for different players in the Singapore’s economy. The goal was to develop quality work opportunities and/or ensure growth of wages that were paid to the largest proportion of Singapore’s population (International Labour Office 2010). This finding suggests that tripartism encompasses the framework for identifying solutions to different issues such as flexible job arrangements, shifting wage structures, and the creation of performance-based wage systems to boost national productivity. Tripartism also guarantees income to both young and old through employment and re-employment, ensures proper skills and knowledge-job matching, and/or facilitates industrial relations crisis recovery among other important aspects of ensuring a non-confrontational industrial relations environment.

Parties to the Tripartite Model: How they have helped to make it work over the Years

Parties to the tripartite model collaborate for mutual benefit by developing and maintaining social dialogue. MOM, NTUC, and SNEF pursue partnerships to enhance collective problem solving in matters of formulation of the employment sector policies and the implementation of various industrial relations policies. Social dialogue approaches to the resolution of industrial relations challenges have developed over the years. They are built on the platform of shared responsibility, mutual respect, mutual trust, mutual benefits, understanding, and commitment to improving the relationship among the parties to Singapore’s tripartite model.

Sharing responsibilities is important in ensuring mutual benefit. Sharing fosters social development and economic progress. Common understanding promotes the sharing of both formal and informal industrial relations information to help in addressing proactively issues that influence employees, their families, the nation, and the employers. This situation requires mutual respect and trust, which have been developing over the years. Hope ensures ardent involvement and exchange of ideas to enhance harmony among the stakeholders. The tenet of mutual benefits ensures cooperation by enabling the sharing of benefits by all parties, including employees and other stakeholders. Continued efforts generate the appropriate synergies in all tripartite partners to ensure sustainability of effective industrial relations policies, laws, and regulations.

Ministry of Manpower

The Ministry of Manpower (MOM) plays the role of directing the process of formulating and implementing various policies that influence the workplace and workforce across Singapore (Ministry of Manpower 2004). Its main objective entails building a global healthy labour force, which can perform optimally while working in the most favourable workplace in a cohesive society. The ministry functions to achieve three main strategic outcomes, namely global competitive workforce, progressive workplace, and long-term employability of all Singaporeans to enhance financial security.

MOM has industrial labour relations and workplace divisions that discharge responsibilities such as the promotion and maintenance of industrial stability and coexistence of different players in the labour industry in peace by ensuring tripartite cooperation. It also plays the role of adjudication through the industrial court. The court oversees industrial relations dispute resolution, enhances the formulation and implementation of collective bargaining treaties, and offers advisory services to MOM’s policy to ensure compliance with the constitutional law (International Labour Office 2010). MOM ensures close cooperation between social partners in industrial relations. Indeed, the role of MOM in Singapore’s industrial relations has been evolving (Tan 1995). Through MOM’s innovative strategies for human capital management in Singapore, the best practices such as flexible wages and good work-life fit are not only promoted, but also appropriate statutory frameworks that have been developed and implemented. Consequently, as a strategic partner in Singapore’s tripartite model, MOM ensures cooperation among labour unions and businesses. The goal is to guarantee high retention rates of employees to induce mutual benefits.

Singapore National Employment Federations (SNEF)

SNEF was created through the join up of Singapore Employers’ Federation (SEF) and National Employers Council (NEC) in 1980 (Lee 2000). The partner to Singapore’s tripartite employs about 18% (about 540,000) of the overall workforce. It has a membership of about 2000 organisations. Singapore has about 4000 business establishments each of which has employed above 50 people. There are about 142,000 business establishments employing less than 50 people. More than 75% of all companies have their employees not unionised (International Labour Office 2010). More than 50% of all firms that have employed above 200 people subscribe to SNEF membership.

SNEF plays the role of improving working quality standards and fulfilling the organisation’s obligations to consumers, employees, and their shareholders. Its main contribution to industrial relations includes human resource capital development through training to increase skill-base and employability levels. It also gathers, analyses, and shares human resource-related information together with the emerging best practices in its management. Besides, it functions as a consultancy agent in industrial relations issues where it interprets labour laws and HRM issues. It also raises awareness on different HR issues whilst promoting accessibility to various human resource development programmes.

SNEF plays an incredible role in enhancing collaboration among players in the tripartite model to enhance mutual benefit. It accomplished this agenda by ensuring that employers commit themselves to serve their workforce while complying with employment laws and regulations. It also engages in the implementation of tripartite guidelines in situations where the party needs elasticity in the implementation process. Together with other partners, SNEF handles HR issues to foster sustainability and competitiveness in the employment industry.

National Trades Union Congress (NTUC)

NTUC is a Singaporean national federation that was developed in 1963 (Lee 2000). It has 69 trade union affiliations and 6 alliance affiliations. Its members account for about 18 percent of the total workforce. It has 7000 leaders who are elected at the company level. About 1,200 leaders work at the union’s headquarters while 21 others work at the national level. Through 12 enterprises, NTUC ensures stabilisation of prices to increase employees’ buying power. It also champions the protection of Singapore’s workforce purchasing power. NTUC has established the ‘Consumer Association of Singapore, Ong Teng Cheong Labour Leadership Institute and Employment, and the Employability Institute’ (International Labour Office 2010, p. 8). These organisations benefit NTUC members via offering scholarships, provision of training subsidies, recreational benefits, and the provision of social benefits to members.

Contribution of the Model in Dealing with Human Resource Problems in Singapore

HR scholars claim that effective management of workforce challenges can improve workforce productivity and engagement. It can also reduce staff absenteeism and workforce turnover by about five folds (Dessler 2004). Indeed, the HR handles all issues that affect employees within an organisation. Being a meritocratic nation, it is paramount for Singapore to develop and implement a fair merit-based approach to managing employment practices. The nation also has a diverse workforce akin to cultural, ethnical, religion, gender, and other demographic characteristics of its workforce population. A merit-based approach to workforce management is essential in ensuring the admission of people from all backgrounds, irrespective of their diversity differences into the workforce based on their qualifications (Behara 2011). The tripartite model provides a merit-based approach to managing human resource issues in Singapore.

Human capital management is focused on improving employee conditions and welfare with the objective of making them productive in their work for optimal outputs in terms of realising the organisational goals. Singapore’s tripartite model is developed with this goal in mind. The model entails a human resource planning and management strategy. Conner and Ulrich (2006) claim that planning of human capital permits organisations and government agencies to put in place mechanisms and resources to achieve strategic objectives. Gartner (2006) supports this assertion by further retaliating that human capital management is beneficial since it fosters both efficiency and effectiveness in the use of resources. This case is perhaps one of the essential benefits of human capital management for organisations, which want to accomplish the same set of tasks using fewer employees.

Conclusion

Singapore’s tripartite model encompasses a tool for human capital management. Human capital management provides viable and accurate projections for staffing needs in an organisation. It offers a projection of the necessary budgetary requirements to meet these needs. This model ensures proper planning to address industrial relation challenges in time before confrontations can grow into conflicts that lead to industrial strikes. Human capital management offers precise rationale for relating training and development expenditures with the rising organisational benefits in terms of increased productivity and performance. This provision goes far in aiding to maintain, improve, and retain diversified human capital. This merit is particularly important in nations that possess a diverse labour force such as Singapore.

References

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