News Release

Employment practices changing worldwide

Book Announcement

Cornell University

ITHACA, N.Y. -- A new book by a world-renowned Cornell University labor economist and an Oxford scholar shows how established employment practices - how people are hired and trained - are being challenged in seven industrialized countries, including the United States. It identifies a pattern in those diverse changes, documents the costly and sometimes dangerous problems that can ensue when employment practices change, and suggests ways to improve things.

The book, Converging Divergences: Worldwide Changes in Employment Systems, explores recent changes in employment practices in the automobile and telecommunications industries in Australia, Britain, Germany, Italy, Japan and Sweden as well as the United States and is based on extensive comparative studies. The authors are Harry C. Katz, the Jack Sheinkman Professor of Collective Bargaining and director of the Institute of Collective Bargaining in the School of Industrial and Labor Relations at Cornell, and Owen Darbishire, a university lecturer in the Said Business School and fellow, Pembroke College, University of Oxford.

As worldwide union membership declines and income inequality increases, one-flavor employment practices are giving way to a broad variety of human resources systems and labor-management strategies, explains Katz. One growing problem: "Companies often pass human resources responsibilities to line managers, plant managers and industrial engineers," he says. Such decentralization of HR responsibilities can occasionally cause a major disaster. When a large oil producer made line managers responsible for training employees about standard cleaning procedures, one refinery suffered an $800 million explosion because maintenance workers failed to follow an essential procedure - or didn't know about it.

Other employment-practice problems that cost companies money: When British Telecom decentralized its industrial relations function, employees in different locations began working under different practices. The firm soon discovered that technical people trained in London were only able to handle wiring at corporate headquarters, not unstandardized switching software in other parts of

the company. And when AT&T gave line managers HR responsibilities but failed to inform them about the company's own collective bargaining agreements, it faced costly grievances by workers for violating those agreements.

Katz's advice for companies that want to deal successfully with decentralized, divergent employment practices and systems? Be sure to train line managers on critical legal and contractual requirements. "All line managers think they are 'good with people,' but they also need to know how OSHA, EEO, union contract requirements and regional trade agreements can affect their people and operations. They also need stronger negotiation skills. And most important, they need to know how to manage change.

Who's doing it right? Katz points to Colgate-Palmolive, which conducts formal briefings on issues the line management and HR staff attend together. "The company is trying to get line managers up to speed around the world. They found it enormously beneficial to let professionals talk together and bring their distinctive perspectives to the training room."

Katz also notes that, despite problems, companies in general benefit from a proliferation of diverse employment practices. In particular, human resources managers within companies "have more influence but don't know what to do with it and often aren't strategic in their thinking." Unions, on the other hand, are disadvantaged by the diversity in employment practices because "it weakens their power and influence. They have to find ways to navigate this new world with a lot of different kinds of HRM."

And finally, the low-end "sweatshop" segment of the global economy is extremely disadvantaged by the growing diversity of employment practices worldwide and must rely on government regulation, which Katz favors, to limit abuses. Unfortunately regulation often comes about only when such abuses are publicly exposed.

Converging Divergences provides fresh insight into the impact of globalization on employment relations and is required reading for anyone interested in worldwide changes to employment systems," said Russell Lansbury, a professor at the University of Sydney, Australia.

Converging Divergences: Worldwide Changes in Employment Systems was published by Cornell University Press under its ILR imprint earlier this year. It may be ordered by contacting CUP at (607) 277-2211 or visiting this web site: http://www.cornellpress.cornell.edu.

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