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| Sunday, 23 May 2004 |
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Prime Minister addresses Human Resource Conference : Let's work together to develop country IPM Sri Lanka as far as I know had its beginnings way back in 1959. I was then only a little schoolboy, and we were living in a country very different to the Sri Lanka of today. Business, be it in the production or service sectors, was functioning in an environment very different to the business environment of today. The very slow pace of technological change was a characteristic feature of life in those days. In such a technology environment when an employee was recruited to a firm, you could be sure he would be doing the same work, in the same way, until his retirement twenty-five or thirty years later. The reason was that the kind of work expected of different categories of employees changed very slowly indeed in the sleepy technology environment of those days. At the relatively low levels of technology existing at that time, increase in productivity was largely a function of getting your workers to work physically hard for the lowest negotiable wage. What a different reality that was when compared with the knowledge-based technology environment of today. Now in most types of work increase in productivity is a function of getting your workers to use their brains and apply the knowledge they have received through training to machines that do much of the physical work that humans did at the time IPM was born in the late nineteen fifties. Very different The functions of a personnel manager of that period were very different to those of the human resources manager of today. His job was to recruit people, fix their remuneration, provide satisfactory working conditions, carry out disciplinary inquiries, and apply sanctions if they don't do the work for which they were contracted. In my recollection most personnel managers of those times were either lawyers or retired army and police officers. They also had the hard task of dealing with the unions on behalf of management, and they did so as any well trained lawyer or police or army officer would do. As a result where relations between management and labour were concerned, opposition rather than cooperation was the order of the day. All this is now a part of history, and is at best the concern of economic historians. What a different world we live in today. The captains of industry and the providers of services are called upon to organize their firms in a very different way. This is the outcome of two important processes of change that have swept across the global economy especially in the last fifteen years or so. Either you go along with these two processes and strategise the best deal out of them for your country or you get left behind to stagnate in the past instead of moving into the future. The first is the process of rapid technological change. Today technology changes from year-to-year or perhaps more correctly from month-to-month. Machines take the place of physical labour in most though not all sectors of the economy. While this is happening on the one side, employees are called upon to acquire new skills in the use of newer and newer machines through the acquisition of newer and newer knowledge. The productivity of a firm increases no longer through the application of hard labour. In this age of rapid technology change, the productivity of a firm is a function of the application of skills based on knowledge. New skills Necessary Any firm wishes to survive in relation to other competing firms. If it is to do so in today's technology environment, its work force - from top to bottom - has to be learning new skills all the time. The employee who does not acquire new knowledge and develop new skills as required by the firm will soon be useless to the firm. The other process that has had a significant bearing on the organization of the firm in countries such as ours is the process of globalization. Today the production of specific goods and services frequently moves from one country to another. Depending on the comparative advantages of different countries at different points of time, firms producing different goods and services shift their enterprises from one country to another. When some production or service activity shifts to a new country, new skills relative to the technology used in that production or service line have to be acquired by the work-force of the firm in the new country. So is it in the case of the out-sourcing of specific activities to countries where the appropriate labour costs are low. For instance, a certain amount of diamond-cutting was out-sourced to Sri Lanka. The work-force of the local firm had to be taught the skills of diamond-cutting which was new to them. I also know of some Sri Lankan IT firms to whom certain large European companies have out-sourced their record-keeping because the cost of data entry is cheaper in Sri Lanka than in Europe. Here too new skills and techniques had to be taught to the local data entry personnel. Now all this means that day a Sri Lankan firm can take advantage of new business opportunities on the one side and also remain competitive on the other if it has a dynamic programme of developing its human resources. That means it must focus heavily on the continuous training, re-training and upgrading of its workers with appropriate skills and know-how based on new knowledge. In short, Personnel Management per se is a thing of the past. It has now expanded to incorporate Human Resource Management. It is now widely recognized that Human Resource Development is the key to competitiveness on the one side, and to the ability to respond to new business opportunities on the other. That is why in Germany which is a highly developed country, the Human Resource Capital is today double its Physical Capital of buildings, plant, machinery and equipment. Fifty years ago, the value of Germany's Human Resource Capital was about equal to that of its Physical Capital, while 50 years earlier it was less than half. Changes planned In Sri Lanka, we are now at a point when so many changes are planned in the economy. These changes will call for new forms of production and new types of firms where human resource management will be a dominant concern. I therefor have no hesitation in stating that organizations such as IPM have a key role to play in the future development of our country. The human resource management professionals that IPM is helping to train will no doubt constitute a cornerstone of the new structures and institutions through which the Sri Lankan economy will move into the future. It is important that the human resource managers of Sri Lanka's modernizing economy should keep in mind a few elements of concern which I, as a politician, would like to share with you. One, we agree that in a modern economy higher levels of skill in the work-force of a firm lead to higher levels of productivity and competitiveness. The benefits that accrue to the firm must be shared equitably with the skilled work-force that would have contributed significantly to the success of the modern firm. The contribution of skill to profit must be recognized through the instrument of fair and just remuneration. Two, we agree that human resources will constitute a cornerstone of a modern firm's success. Maintaining a happy and contented work-force is a function of human resource management. This can only be achieved through the linking of profit and success on the one side to rewards and other conditions of work on the other. Participation of workers Three, we agree that in the technology environment of today productivity is a function of the participation of the workers in a firm's success. Therefore take the workers into your confidence and discuss with the unions whether they think the firm is concentrating on the right products or services. Ask them what they think the industry should do: Whether the workers are getting the right type of training: Whether they are getting the right rewards for their new skills. If the unions feel that the firm is rewarding their members in a fair and just manner, then you can expect the unions in turn to protect the firm and through the firm the industry a whole. It is conviction that any modern Sri Lankan firm should structure itself on the premise that productivity and success on the one side and worker satisfaction and remuneration on the other go hand in hand. The human resource factor has assumed a dominant position in the technology environment of today. As such, the success of a firm and its productivity depend on the strength and satisfaction of its human resources. At the same time the strength and satisfaction of its human resources depend on the success and productivity of the firm. They are the two sides of the same coin. This conviction is both political and managerial at the same time. At another level it is an expression of how politicians on the one side and corporate sector managers on the other-different as we are from each other - can think together, complement each other, and share a common platform. So let us work together to develop our country and improve the social, economic, cultural and spiritual well-being of our people. |
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