High performance workplace practices in APEC economies
- Executive summary
- What is the nature and level of uptake of HPWP in your economy?
- What organisational features are associated with the adoption of HPWP, or a barrier to HPWP in your economy?
- Does the adoption of HPWP lead to improved organisational and individual outcomes? Are there any adverse outcomes?
- What government policies are targeted at increasing the uptake of HPWP? How effective are these policies?
- What has been the impact of other policies or wider regulation on the adoption of HPWP?
- How do wider social, business and labour market factors influence HPWP uptake and outcomes? Are these being targeted as a means of influencing HPWP?
- What future surveys/studies are planned in your economy for the collection of material requested in this questionnaire?
As part of a project on High Performance Workplace Practices (HPWP) for the Human Resources Development group in APEC, ten APEC economies (Australia, Brunei, Canada, China, Chinese Taipei, Malaysia, New Zealand, Peru, Singapore and Thailand) responded to a questionnaire on these practices. The questions addressed the adoption of HPWP within their economy, the impact of these practices, and the nature of policies to encourage their use. The practices considered were employment related: training, pay systems, employee involvement, decentralisation, and flexible work arrangements. The economies were asked to rely on existing information sources in their responses. This overview highlights key commonalities and differences in those responses, and also draws on the presentations and discussion at a workshop on HPWP held in New Zealand in August 2007.
The rate of adoption of HPWP tends to be higher in more developed economies. This is likely to reflect the presence of factors that typically favour their use at a firm level, such as a more highly educated workforce, greater use of technology (i.e. higher capital intensity), managers' education levels, corporate rather than family ownership, multinational presence, and larger firms. There are exceptions to this rule with economies traditionally adopting certain practices as commonplace, such as performance based pay in Chinese Taipei. In addition we would expect the adoption of HPWP to rise over time as the underlying factors noted above become more prevalent, as experience in using HPWP creates more information to support decisions on adopting HPWP, and as competitive processes filter out firms with poor practices. However, it is interesting to note Canadian data which show a fall in the adoption of some HPWP practices. It will be interesting to follow future research into the factors contributing to this decline.
The type and rate of adoption of HPWP by firms within an economy tends to be influenced by business size (larger firms are more likely to adopt decentralised and teamwork practices), and sector (the retail/accommodation sector provides more part time work than other industries). Barriers within firms to the adoption of HPWP include managerial and employee attitudes to change and power sharing.
The impact of HPWP is considered beneficial for firm performance and for the performance of economies as a whole. Much of the evidence provided by economies to support this hypothesis was based on business case studies, and reflected the consensus of international evidence. Canada and New Zealand referred to statistical analysis within their own economies that supports the link between better workplace practices and firm performance. The mechanism for this link depends on the practice, but the employment related practices chosen for this study are assumed to raise employee productivity by raising employee skill levels and motivating and engaging workers more effectively. Consequently workers, as well as firms, benefit from the use of these practices. Common outcomes include better job satisfaction, higher pay, reduced worker turnover, higher product quality, and ultimately improved productivity.
Across the responding economies, governments took similar roles in promoting each group of practices. Economies were actively involved in promoting workplace training, through subsidies to training, funding/operating training institutions, and the creation of national qualification frameworks. The rationale for economies' active involvement in training provision is based on the consideration that firms under-invest in training due to their limited ability to capture the benefits from training investments due to worker mobility. At the other end of the policy scale, economies took a more hands-off role in promoting the adoption of employee involvement, empowerment, and work flexibility practices. Economies promoting these practices often used peer to peer learning (through business networks), and raising awareness of the benefits of those practices, such as through providing case studies and other supporting material.
Many of the Asian economies (Singapore, Malaysia, and Thailand) actively promoted the use of performance pay. A key rationale for promoting performance based pay (or profit sharing) is that it increases the resilience of jobs and employment to large economic shocks, such as was experienced with Severe Acute Respiratory Syndrome (SARS) and the Asian financial crisis. This resilience is important when social security systems are set at a low level of provision. The Asian adoption of performance pay also highlights the use of tripartite mechanisms to influence the adoption of new practices, where bipartite and tripartite pay awards can be influenced by the government. New Zealand and Singapore also used tripartite arrangements to promote improved practices.
Responses from the economies of China and Brunei emphasise the ability of governments to change practices through the institutions and businesses where they have governance (through ownership or funding). Even in economies where the control over management is more direct, bureaucratic processes do not necessarily accelerate the adoption of improved practices. This is consistent with a view that many of the barriers to adoption of HPWP lie within firms themselves.
The regulatory setting considered most influential to the adoption of HPWP was the industrial relations framework and environment. Many of the practices in this study form part of the terms and conditions of employment (e.g. performance pay, flexible working times). An adversarial industrial relations environment can create a barrier to their adoption, particularly when the focus and conflict is over basic employment conditions, such as the level of wages.
Broader influences on the adoption of HPWP were the aging population and the shrinking labour force, increased globalisation and competition, and the demands of the knowledge economy. Thailand provided the clearest example of how an economy's culture can influence adoption of these practices. The hierarchical nakrian-ajarn (student-teacher) relationship can mean that worker/tutor learning systems are less interactive and less effective as a result.
The key gap in economy responses was around the efficacy of their policies. No policy evaluations were provided or drawn upon at the workshop. It would be useful if future work could focus on bringing together evaluation evidence from participating economies.
The objectives of the HPWP project are to:
- Provide for a review of existing research on the extent to which HPWP have been adopted within APEC economies and an assessment of policies designed to support the adoption of HPWP.
- Provide for a workshop in New Zealand where the research is shared, and policy lessons discovered during the survey are shared. This would allow delegates to inform themselves of the practices in operation in various economies and draw potential lessons for their home economy.
- Produce a publication after the workshop collating the research of each economy and workshop proceedings.
All APEC economies were invited to participate in a survey of HPWP. This involved participating economies answering seven questions on the extent to which HPWP are used in the economy, what influences their uptake, the impact of those practices, and the efficacy of policies designed to encourage HPWP. For the purposes of the study HPWP refers to workplace practices that directly involve or relate to employees/workers. The indicative list of HPWP provided in the questionnaire is reproduced below.
Employee Training /Knowledge Management
Practices that increase the skills of workers, or improve employee skills to match the work routines/skill requirements of the organisation (including targeting skills in employee recruitment). Examples are: Job induction courses, Job related training (in house/in team/ external), Literacy training (numerical, language), Mentoring, Job rotation, Career progression, and advanced employee selection and recruitment processes.
Pay Systems/Performance Appraisal
Practices that attempt to align employee actions with organisational goals by modifying remuneration in response to worker/team/organisation results. Examples are: Revised payment systems (performance, merit based, or skill based pay), Incentive systems (individual or collective), Profit sharing, Stock options, and Structured performance management and appraisal systems.
Employee Involvement (in wider business)
Practices that provide information about the goals or performance of the organisation to employees, or that provide a voice for employees in strategic decision making in the organisation (e.g. investments, work routines, training). Examples are: Regular communication on business goals/performance to employees, Employee representation on management board, Union/management initiatives or partnership processes, Works councils, Employee satisfaction surveys, climate or culture surveys, and Formal suggestion or complaint systems.
Decentralisation/Teamwork (job focused)
Practices that provide employees, either individually or as a team, with the ability to change or influence their work routines to meet job/team/organisation requirements. Examples are: Problem solving teams, Quality circles, Self-directed work groups/teams, Greater decision making power to employees (about job, supplier and customer relations), Flatter hierarchies and workplace power dispersion, and Job enrichment.
Flexible Work Arrangements
Practices that allow employees to modify their work routines to meet out of work commitments or preferences. Examples are: Ability to switch to part time work, Flexible start/finish times, Flexible working hours, Flexible rostering and shift arrangements.
The seven questions asked of each participating economy were:
- Question 1: What is the nature and level of uptake of HPWP in your economy?
- Question 2: What organisational features are associated with the adoption of HPWP, or a barrier to HPWP in your economy?
- Question 3: Does the adoption of HPWP lead to improved organisational and individual outcomes? Are there any adverse outcomes?
- Question 4: What government policies are targeted at increasing the uptake of HPWP? How effective are these policies?
- Question 5: What has been the impact of other policies or wider regulation on the adoption of HPWP?
- Question 6: How do wider social, business and labour market factors influence HPWP uptake and outcomes? Are these being targeted as a means of influencing HPWP?
- Question 7: What future surveys/studies are planned in your country for the collection of material requested in this questionnaire?
Economies were given three months to prepare their responses by June 2007. Economies differed in the amount of information they provided in response to the questionnaire. Some economies focused on particular practices (such as training) and limited themselves to particular questions where information was readily available. Economies were asked to rely on existing information, research, and studies in order to ease the response burden. Responses to the questionnaire were received from Australia, Brunei, Canada, China, Chinese Taipei, Malaysia, New Zealand, Peru, Singapore and Thailand.
This overview highlights key commonalities and differences in those responses. The overview also draws on the workshop held at the end of August 2007. That workshop focused on policy initiatives in attending economies.
Question 1: What is the nature and level of uptake of HPWP in your economy?
Comparing statistics on the incidence of HPWP across economies is difficult due to limited surveys on HPWP. Where statistics are collected, differences arise in survey definitions of HPWP, definitions of intensity of adoption (e.g. how many staff receive training), how businesses commonly perceive definitions, and survey coverage (e.g. private and/or public sector, industry and firm size). With these caveats the following trends were identified:
Australia (81%), New Zealand (86%) and Canada (69%) had the highest rate of workplaces providing training, with Singapore at 27%.
Performance related pay was more prevalent in Asia, with 81% of Singaporean firms having flexible wages, and 62% of Malaysian collective agreements having a performance based element. By contrast, 14% of Australian collective employment agreements include performance based pay, and 42% of New Zealand workplaces had a few employees on performance pay schemes. The Chinese Taipei 2006 survey on workplace innovation indicates that 64% of firms used incentives to promote workplace innovations (sometimes/often/always). More than 70% of workers frequently searched for workplace innovations (often/always). Some 45% of firms had instituted a job rotation system (sometimes/often/always).
Both New Zealand and Canada had comparable proportions of workplaces (30-36%) using some form of employee involvement. New Zealand workplaces were more likely to use problem solving teams (39%) and flexible job design (26%) than in Canada (18% and 13% respectively). 15% of Canadian workplaces utilised joint labour management committees, but such committees are little used in New Zealand (or known by that term). Interestingly, Canadian use of flexible job design had declined from 31% from 2001 to 13.1% in 2003.
33% of Canadian workplaces provided flexible hours, and 40% of Australian workplaces provided flexible start-finish times (26% on a day to day basis). 34% of New Zealand workplaces allow for contracted hours. Similar proportions of Australia and New Zealand workplaces provide part time work (61% and 67% respectively). By contrast only 5.3% of Singapore firms have flexible work arrangements.
A notable result from statistics from Canada is the fall in the use of many HPWP between 1999 and 2003. More recent surveys of Canadian practices are yet to be released, and how this trend develops will be of considerable interest. No results from research into the causes for this result are available yet. Over the same period Canada also experienced a reduction in the rate of innovation, with a decline in the proportion of workplaces that introduced any innovation (both product and process) from 48.1% in 1999 to 41.3% in 2003 (44.8% in 2001).
Question 2: What organisational features are associated with the adoption of HPWP, or a barrier to HPWP in your economy?
Most responses to this question focused on the workplace characteristics of firms adopting particular practices. Across the responses a fairly consistent picture emerged:
Like most economies, Australia found larger employers more likely to provide structured training (98% compared with 39% of small employers). The main reasons for training are maintaining professional status or meeting industry standards (55%), staff development (54%), and improving quality of goods/services (53%). Canada and New Zealand noted that businesses are also more likely to participate in training when making organisational or technological changes, or introducing a new innovation. In Thailand studies point to firm size, the education level of workers, quality control (such as ISO), and joint programs with other firms as factors associated with formal employee training. Other influential factors are top management commitment within firms and the quality of human resource managers.
Chinese Taipei's response also highlighted that large corporate firms provide more training than family owned businesses, and the nature of corporate leadership also has an impact, with firms led by managers with higher education levels and international experience (in learning or work) providing more training.
A New Zealand survey found that the biggest barrier to training is the opportunity cost of staff time to undertake training (identified by 66% of firms), followed by the direct costs of training (60%), and the availability of training and lack of staff interest (both 50%). In 2006 47% of businesses had changed their employment practices within the last two years. Out of those practices, training was considered the most important change (32%), followed by occupational health and safety (28%).
New Zealand also reported that the biggest differences between large and small firm adoption rates were for employee feedback programmes (62% for large firms compared to 28% for small firms), problem solving teams (58% c.f. 35%), and the use of performance reviews (89% c.f. 56%). Some of these differences are to be expected given the smaller span of control in smaller workplaces (reducing the need for formal communication and feedback practices).
- There are sector practices that influence the adoption of flexible working arrangements. In Australia industries where higher proportions of firms provide flexible working arrangements are Professional, Science and Technical Services (60%), with the lowest proportions in Education and Training (where start/finish times and leave may be constrained by timetable). Industry differences in flexible working arrangements are sometimes driven by the nature of the business e.g. the use of part time in retail trade and consumer services.
The Malaysian response highlighted several factors that encouraged the adoption of performance based remuneration systems. These were satisfactory labour relations, mutual trust, information sharing and understanding, employee education and consultation, training and upgrading worker skills. Barriers to adoption were the opposite to success factors, including mistrust of management, lack of management consultation on performance measures, risks to existing terms and conditions, and lack of information. In the adoption of its flexible wage system, Singapore noted that unionised firms had higher HPWP adoption rates as unions explained the benefits of the flexible wage system to workers (unionised workplaces also tend to be large firms).
The response from Peru highlighted that a healthy business environment is a precursor to the adoption of HPWP. Peru suffers from large amounts of informal employment, low education levels, and small firm size, which prevent the development of businesses that can sustain HPWP.
Other barriers identified in responses were the need to win over workers, as well as managers, and intermediate managers. A related problem is the evidence on benefits of HPWP to persuade stakeholders is often hard to distinguish from other changes that may be occurring within a workplace (and this is certainly an issue for empirical research).
In Brunei and China initiatives to promote HPWP are focused on the public sector. China's contribution to the workshop highlighted that even when adoption can be encouraged through "ownership", similar barriers identified above still apply. In addition, China has to deal with the sheer scale of organisations involved. China has embarked on a program to improve performance management systems in public institutions in the education, science and technology, culture and public health sectors, comprising 1.3 million institutions employing 30 million workers.
Question 3: Does the adoption of HPWP lead to improved organisational and individual outcomes? Are there any adverse outcomes?
The very title of HPWP suggests reasons for promoting these practices, in that they are supposed to generate high performance. Questionnaire responses suggest that positive benefits do result. Canada provided references to many studies that show positive outcomes associated with HPWP, such as higher productivity and improved product quality in firms who undertake these practices. These positive associations are also seen in New Zealand survey data, but causation is harder to prove. Nevertheless, a narrower set of evidence does suggest implementing these practices does improve business performance. There is also a growing set of case studies across participating APEC economies that show cause and effect results.
In addition to the benefits HPWPs produce for employers and employees, they can have beneficial impacts on the wider economy and society. One example is the benefit for families from implementing work life balance policies. Another example is the introduction of the Flexible Wage System in Singapore, which was introduced to help the economy deal with large economic shocks, such as those that arose from SARs and the Asian financial crisis. Flexible wages reduce wage bills in downturns and can reduce the staff retrenchment that might otherwise occur.
The case studies indicate that how firms implement HPWP is critical to their success. Firms differ in their operating conditions and the implementation of any HPWP should be sensitive to this. Also, within a broad set of practices such as HPWP there can be opposing directions that both generate positive results for a business. In Canada firms that either increased or decreased their degree of centralisation (5% and 2% of firms respectively) rated themselves better across a number of indicators (productivity, sales, product quality, customer satisfaction, and profitability) than firms that made neither change. This simple comparison does not separate out the contribution of particular practices when firms undertake several organisational changes, or do so in conjunction with some other innovation.
Some of the key impacts referred to by economies were as follows:
Australia's response focused on the role of enterprise bargaining in creating flexibility in work arrangements. Case studies showed improved organisational outcomes such as higher quality of service, better retention, greater skills depth, and greater employee commitment, arising from this flexibility.
Canada had reviewed a large range of Canadian research and highlighted positive correlations between the adoption of HPWP and organisational outcomes (overall productivity, innovation, profitability, sales performance, customer satisfaction and product quality). Product quality seems most responsive to the use of HPWP, while sales are only marginally different between firms who have and have not implemented at least one HPWP. There were also positive correlations found between the adoption of HPWP and individual outcomes (worker satisfaction, turnover rate, commitment, motivation, absenteeism, stress and performance).
China highlighted case studies that provide examples of how the reforms to public institutions can generate greater productivity, profitability, and higher wages.
New Zealand noted research showing a link between some practices (performance pay, greater employee responsibility, and measuring employee satisfaction) and productivity and profitability. Employee training is also a significant factor in generating innovation. There is also evidence to show that employee satisfaction is associated with HPWPs in the workplace.
Malaysia reported that feedback from implementing firms indicates that performance based pay systems improve teamwork/cooperation, reduce disciplinary issues, and lower product rejection rates. Singapore identified case studies suggesting that flexible wages systems help companies engage and motivate employees. It also helped firms cope with business downturns, reducing the need for retrenchment.
Singapore's findings from a 2005 survey on training found that firms providing training consider it to have a positive impact on work productivity (84%), quality of product and services (82%), and customer satisfaction (73%). Only 37% considered their training had a positive impact on innovation. These results are mirrored in feedback from training participants, with over 70% indicating that they can do their current job better following training. Research from Singapore also shows that firms offering flexible practices enjoy lower levels of voluntary turnover.
Question 4: What government policies are targeted at increasing the uptake of HPWP? How effective are these policies?
Individual economy responses around policy approaches typically focused on particular types of HPWP. Nevertheless, there were more similarities than differences in policy approaches for any particular practice. Most economies took a stronger policy approach to training relative to flexible working arrangements and practices such as employee involvement. No economies were able to provide evaluation evidence on the effectiveness of their policies. This is a large gap that hopefully will be filled in future.
As mentioned above the strongest policy levers are used to encourage training. Levy and fund systems and forms of government co-funding are commonly used in conjunction with broader involvement, such as government funded/operated education institutions, and the setting of training standards and certification systems. The use of stronger incentives for business training is justified by wider interests in the efficiency and flexibility of the labour market from workers being able to move between jobs, and the corresponding underinvestment in training that results from firms being unable to appropriate all of the benefits from staff training.
Some economies also used the government's role in tripartite setting of wage and employment conditions to encourage the adoption of targeted practices, and the best example of this is the implementation of flexible or performance based wage systems in Malaysia and Singapore. For example, the introduction of flexible wage systems in Singapore involved the recommendations from a Tripartite Committee on forms of wage flexibility. The committee recommended a menu of flexibility options that the tripartite organisations encourage firms to adopt.
At the other end of the policy spectrum economies took a relatively hands-off approach to encouraging practices around flexible working arrangements, employee involvement and teamwork and decentralisation. Case studies indicate that how firms implement these practices is important to their success, and their practical implementation is often unique to a workplace. As a result these practices are less amenable to prescriptive policy approaches. Examples of encouraging and facilitating policies are the Workplace Productivity Agenda (WPA) in New Zealand and Flexible Working Arrangements in Singapore. The WPA in New Zealand also uses tripartite processes to secure broad ownership of the need to improve productivity through better practices and to deliver messages and advice to employers and employees.
Features of these encouragement/facilitation initiatives are the use of business to business learning (use of business champions, peer networks, case studies), information provision, and marketing to create awareness. The format for these initiatives reflects a view that firms lack information on the merits of HPWP and how to apply them to their own business. Information provision is the direct solution to that problem. Governments are not always seen as a credible source of information and the use of industry bodies, business to business networks or CEO to CEO knowledge sharing is used. As a further step some responding economies also co-fund advisory services, or fund increases in the capability of business or business advisors to help implement HPWP (Canada).
Brunei and China both focused on public ownership mechanisms to improve practices in public service organisations.
More details on responding economy approaches and particular policies are as follows:
In the area of family friendly initiatives, Australia uses: awards to recognise and demonstrate options; information provision, industry based projects; clauses database to help write agreements; and research.
In Brunei the Civil Service Institute provides training to the public sector (administration, management, R&D and ICT), and the Public Service Department also funds overseas training to selected government employees. Quality circles, civil service award, and public accountability systems have also been introduced in the public sector. Another area of work is public sector performance appraisal, which is currently limited to awarding bonuses, or further study/training and job status. The Management Service Department monitors efficiency and effectiveness of government departments through "Quality and Productivity Improvement", and the key challenge is measuring performance adequately.
China has embarked on a program to improve performance management systems in public institutions: education, science and technology, culture and public health. They comprise 1.3 million institutions employing 30 million staff, and spending 30% of the government budget. The reforms cover organisational design, the personnel system (recruitment, promotions, training, appraisal and salary systems), pay systems, social security system and financial management. The personnel reform has three aims: encouraging the use of job descriptions, open appointment on merit, and performance pay. Prior to these reforms central government controlled many personnel processes (e.g. salary setting, employment plan) reducing the ability of organisations to implement improved HR and management methods.
Canadian policy examples across both federal and provinces show how the balance of policy heavily focused on human capital/skill development with an emphasis on training.
In Chinese Taipei training is encouraged through grants, tax credits, and tax exemptions for firms undertaking human capital investment (under the Statute for Upgrading Industries 1990). The TrainQuali System (TTQS) requires participating firms to undertake systematic processes (plan, design, delivery, review, outcome) and scores firms on their process and outcomes.
The Ninth Malaysian plan 2006-2010 encourages the implementation of the Productivity-Linked Wage system. The Third Industrial Master Plan 2006-2020 also encourages flexible work systems and performance pay. Information provision is used to encourage businesses to use performance measurement and pay arrangements. This takes the form of briefings, seminars, publications, and workshops.
In New Zealand a major policy initiative is the Workplace Productivity Agenda. The Agenda is a tripartite initiative. It focuses on seven workplace productivity drivers (leadership and management, investing in skills and people, networking and collaborating, innovation and technology, workplace culture, workplace organisation, and measuring what matters). Across these drivers, a process of awareness raising, diagnostic tools, implementation, and research and evaluation is being used to support their development in workplaces. To date the agenda has focused on awareness raising (workshops, case studies) and a diagnostic tool to help workplaces identify potential gaps in their practices, and possible areas for improvement.
In Peru the government has provided a reduced labour cost regime for micro enterprises (up to 10 FTEs). The aim is to encourage more structured employment arrangements and facilitate the transition from micro to small enterprises.
In Singapore the Flexible Wage System (FWS) was recommended by a tripartite taskforce and was designed to help firms adjust to a rapidly changing business environment. FWS comprises three components: (1) increasing an annual variable component of wages that reflect business/individual performance, (2) a monthly variable component, and (3) moving away from seniority based wages. FWS was a response to the Asian financial crisis and SARS which both depressed activity and the labour market.
Singapore uses a tripartite Committee on Work Life Strategy that drives the promotion of work life harmony. It takes a four pronged approach (1) developing the business case (2) CEO to CEO promotion (3) marketing and promotion (4) developing capability through a WOW! Fund which subsidises implementation of flexible work arrangements, training consultants and HR Practitioners, and educational websites and publications.
The Thai Skill Development Promotion Act 2002 provides firms which establish and register training centres a 200% tax deduction on training costs. Firms with over 100 employees must provide training to at least 50% of employees or pay a fee per untrained employee each year. Other tax incentives apply to the cost of training equipment and trainer costs. The Ministry of Industry makes an annual Prime Minister's award for HRD excellence resulting in improved productivity and competitiveness. Awards are also made for good labour relations.
Question 5: What has been the impact of other policies or wider regulation on the adoption of HPWP?
Several HPWPs form part of employment terms and conditions (examples are flexible start-finish times and performance pay) and may be the subject of bargaining. As a result, the bargaining or industrial relations framework, and employer-employee (union) relations, can have an impact on the introduction of changes or new workplace practices. This is seen in Malaysia and Singapore where performance pay has been introduced via a tripartite working group. In Australia one rationale for the Workplace Relations Reform is to allow workplace agreements to improve productivity via workplace-specific arrangements.
The Canadian response noted that there are limited studies on regulatory linkages to HPWP. There is in general some level of recognition that regulatory policies related to labour regulations, the general trade environment, competition policy and foreign ownership may have, to a certain extent, positive or negative ramifications for HPWP.
The features of an environment supporting HPWP are highlighted in the following examples from economy responses:
China noted that the reform process creates pressure for other supporting policies such as social security when employees are made redundant as a result of employment changes.
Chinese Taipei mentioned that several studies on the impact of regulation have been made, focusing on differences between public-owned enterprises and multi-national corporations.
Malaysia is looking to improve the legal environment for employment in order to provide flexibility and mobility in employment.
For Peru low education levels and labour market "red tape" are considered key issues behind stable business formation and employment practices.
Thailand noted that open and transparent government operations contributed to a better business environment.
Question 6: How do wider social, business and labour market factors influence HPWP uptake and outcomes? Are these being targeted as a means of influencing HPWP?
In response to this question economies identified global and domestic trends that were driving the workplace environment, and consequently workplace practices. Examples from their responses are:
Australia identified that an aging population will require a greater focus on retention and recruitment. This is expected to increase the use of HPWP.
Canada highlighted wider social, business and labour market factors influencing HPWP uptake and outcomes including globalisation, increased competition and the need to increase productivity, the shift to a knowledge-based economy, the proliferation of small and medium-sized enterprises in the economy, aging demographics and associated shrinking labour force, and the subsequent need to ensure the participation of under-represented sources of labour (immigrants, Aboriginal population, ageing workers, etc).
China highlighted the importance of an open labour market (and the introduction of contracts) to help allocate talent and promote change in personnel practices and expose institutions to market disciplines in employment.
The Chinese Taipei knowledge economy strategy includes a responsive and learning society among its four key factors (the others are HPWP, employment through business and economic growth, a knowledgeable workforce).
New Zealand identified cultural factors that might influence the workplace practices preferred by employees. These preferences may be revealed in the status of entrepreneurs in society (relative to sporting heroes), and that may influence the innovativeness and adaptability of the workforce. Policies in this area are limited but national awards and recognition can signal attributes valued in society and the economy.
Peru has a high level of entrepreneurial activity, but much of this is created by necessity. Unemployment is low (5%), but underemployment is high (56%).
Singapore noted that the timing of policies in the economic cycle can be important. Some elements of the Flexible Wage System were introduced during the economic recovery and were better received because they did not result in wage reductions.
Thailand provided the clearest example of how culture can influence the adoption of HPWP. The hierarchical nakrian-ajarn (student-teacher) relationship can mean that worker/tutor systems of learning are less interactive and less effective.
Question 7: What future surveys/studies are planned in your economy for the collection of material requested in this questionnaire?
Economies did not provide comprehensive responses to this question. In general economies tend to measure practices within the set of HPWP that are more relevant to their policy interests. Accordingly, greater emphasis is given to measuring the incidence of training. As economies become more interested in other HPWP, measurement is likely to follow. This has occurred in Canada, New Zealand and Australia, and is evident in Singapore and Malaysia in respect of flexible wage systems.