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Employment Relations in Russia
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Employment Relations in Russia



Found a quick and colorful presentation we did in school for Ruth Aguilera's Comparative Employment Relations/International HR class. Thought to share!

Found a quick and colorful presentation we did in school for Ruth Aguilera's Comparative Employment Relations/International HR class. Thought to share!



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  • ORIGIN : USSR, The Union of Soviet Socialist Republics (also known as the USSR or Soviet Union for short) consisted of Russia and surrounding countries that today make up Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. A federation is a union comprising a number of partially self-governing states or regions united by a central ("federal") government LOCATION : is a transcontinental country extending over much of Northern Eurasia and bordering 16 countries incl.China, North Korea, Norway and Georgia, the Pacific and Arctic ocean and the Caspian, Baltic and Black seas. It extends across the whole of northern Asia and 40% of Europe, spanning 11 time zones and incorporating a great range of environments and landforms.
  • Russia is a federation and formally a semi-presidential republic, wherein the President is the head of state and the Prime Minister is the head of government. In 2007, the population shrank by 237,800 people, or by 0.17% (in 2006 - by 532,600 people, or by 0.37%). Migration grew by 50.2%. 73% of the population lives in urban areas. L argest cities in Russia: Moscow (over 10million inhabitants) and Saint Petersburg (over 4.6million). Culture, its People, Immigration Shift from socialism and egalitarianism towards capitalism. Egalitarianism is a social philosophy that advocates the removal of inequities among persons and a more equal distribution of benefits.
  • The Russian political system is one of the more recent to embrace democracy but remains deeply flawed in terms of its democratic credentials and massively influenced by the power and personality of one man, Vladimir Putin. The Russian Federation was the largest nation to emerge from the break up of the Soviet Union in December 1991. Following the constitutional crisis of 1993, Russia adopted a new constitution in a referendum of December 1993. In the area of political structure and ages, Russia does not fit easily into any category. It is a new country, that has not had a lot of experience with democracy. It is going through major growing pains in its political structures and corruption is a major problem in the government. Essentially the country is described as a federal presidential republic. The constitution of 1993 provides strong powers for the President. The President has broad authority to issue decrees and directives that have the force of law without legislative review, although the constitution notes that they must not contravene that document or other laws. Indeed Russia's strong presidency is sometimes compared with that of Charles de Gaulle in the French Fifth Republic (1958-69). The Law on Presidential Elections requires that the winner receive more than 50% of the votes cast. If no candidate receives more than 50% of the vote, the top two candidates in terms of votes must face each other in a run-off election. The President is elected by popular vote for a four-year term. He is eligible for a second term but constitutionally he is barred for a third consecutive term. The last presidential election was held in March 2008. The Russian Federation The Russian Federation is made up of 83 federal subjects including 21 autonomous republics with the capital being in Moscow. It has a three branch system of government modeled after the United States. The legislative branch is a bicameral federal assembly, it consists of the State Duma and the Federal Council. The Judicial Branch consists of the Constitutional Court, the Supreme Court which is the highest court for criminal, and administrative cases, and the Superior Court of Arbitration which is the highest court that resolves economic matters. Executive Branch The Prime Minister is appointed by the President with the approval of the Duma and is first-in-line to the presidency in the case of the President's death or resignation. The first President of the new Russia was Boris Yelsin who was elected in June 1991. He was followed by his hand-picked successor Vladimir Putin. After a term as Acting President, he was elected for his first term in May 2000 and for a second term in March 2004. When Putin stepped down earlier this year he nominated Prime Minister. Legislative Branch The upper house in the Russian Federal Assembly is the Federation Council. The Council has 176 members who are known as senators. Each of the 85 federal subjects of Russia sends two members to the Council. The federal subjects are the 21 republics, the 47 oblasts, the eight krais, the two federal cities, the six autonomous okrugs and one autonomous oblast (each category of which has different powers). One senator is elected by the provincial legislature and the other is nominated by the provincial governor and confirmed by the legislature. As a result of the territorial nature of the upper house, terms to the Council are not nationally fixed, but instead are determined according to the regional bodies the senators represent. The lower house in the Russian Federal Assembly is the State Duma. It is the more powerful house, so all bills, even those proposed by the Federation Council, must first be considered by the Duma. However, the Duma's power to force the resignation of the Government is severely limited. It may express a vote of no confidence in the Government by a majority vote of all members of the Duma, but the President is allowed to disregard this vote. The Duma has 450 members who are known as deputies. Formerly seats in the Duma were elected half by proportional representation (with at least 5% of the vote to qualify for seats) and half by single member districts. However, President Putin passed a decree that all seats are to be elected by proportional representation (with at least 7% of the vote to qualify for seats) and this system took effect in the election of November 2007. Elections are held every four years. The last Duma election was held in November 2007, so the next one is to be held in December 2011. For the 2007 election, all the deputies were elected by proportional representation and the threshold that parties had to reach in order to secure representation was raised to 7% - one of the highest thresholds in Europe - and, by doing this, Putin has eliminated independents and made it effectively impossible for small parties to be elected to the Duma. Also the registration process for candidates in the election was complicated, so that only 11 of the 85 parties that wanted to field candidates were allowed to do so. All these points have been highlighted by critics of the Russian system of politics. Judicial Branch The Constitutional Court of the Russian Federation consists of 19 judges, one being the Chairman and another one being Deputy Chairman. Judges are appointed by the President with the consent of the Federation Council. The Constitutional Court is a court of limited subject matter jurisdiction. The 1993 constitution empowers the Constitutional Court to arbitrate disputes between the executive and legislative branches and between Moscow and the regional and local governments. The court also is authorized to rule on violations of constitutional rights, to examine appeals from various bodies, and to participate in impeachment proceedings against the President.
  • There are more than 15 prominent political parties in Russia and more than 20 minor parties. The main political party is called United Russia. It was founded in April 2001 as a result of a merger between several political parties. It describes itself as centrist. It is essentially a creation of Vladimir Putin and supports him in the Duma and the Federation Council. Indeed Putin agreed to be the top name on the party's list for the recent Duma elections. In that highly flawed election, United Russia won 38% of the votes which gave them 68% of the seats (305 deputies). The main opposition party is the Communist Party of the Russian Federation led by Gennady Zyuganov. In the recent election, it won 46 seats. The only other parties retaining seats in the Duma are the ultra-nationalist Liberal Democratic Party of Russia with 35 seats, the fake opposition party A Just Russia with 31 seats, and the nationalist People's Union with 12 seats. Western-orientated reform parties are Yabloko (Apple) and the Union of Right Forces. Other parties include the People for Democracy and Justice Party (led by former Prime Minister Mikhail Kasyanov) and The Other Russia movement (led by fomer chess champion Gary Kasparov). United Russia - The party follows the policies outlined by Russian Prime Minister Vladimir Putin. United Russia views itself as a centrist or a conservative party, though not in the sense commonly understood by Western Europeans. Foreign media and observers describe United Russia as a pure "presidential party" set to secure the power of the Russian President in the Russian parliament. The vast majority of office bearers in Russia are member of the party, hence it is sometimes described as a "public official party" or "administration party". Within Russia, the party follows a centralist course. The state-owned media and nearly all privately owned media are more or less politically in line with the United Russia policies. Communist Party of the Russian Federation - is sometimes seen as a successor to the Communist Party of the Soviet Union (CPSU) and the Bolshevik Party. The party has emphasized its uniquely Russian character and it has consistently invoked Russian patriotism and nationalism in addition to the official Marxism-Leninism of the CPSU. Unlike the CPSU after 1956, the CPRF celebrates the rule of Joseph Stalin. The Russian Federal Registration Service says that 164,546 voters have registered with the government as members of the CPRF. Liberal Democratic Party of Russia – The LDPR describes itself as a centrist, pro-reform democratic party; however, it is often regarded, especially in the foreign media, as an ultranationalist party A Just Russia - While it wishes to challenge United Russia, it strongly supported the former President Vladimir Putin and has been criticized as being an opposition party in name only. Some party members argue that the creation of Fair Russia marks the establishment of a two-party system in Russia, and that this new group will provide a much-needed check on United Russia's current hegemony over the Duma's proceedings. Fair Russia is also politically more to the left than United Russia, which is considered more politically to the right and generally more in favor of cautious economic liberalism. Fair Russia's slogan is "We are the party of the working man".
  • Summary Political Scientists define three characteristics that must be met for a state to be considered a democracy. 1. Russia’s top leaders and heads of major cities are elected by the people. This represents a major change in Russia’s political system. Under both the tsars and the Soviet Regime, provincial heads were chosen by and represented central authorities (rather than the citizens they governed). Although many fewer public officials are elected to office in Russian than in the U.S. , the electoral principle has been widely introduced and readily accepted by the Russian people. This is crucial to the development of democracy in Russia. However, elections must be fair, and typically in Russia they have not been for a variety of reasons. 2. The political power is concentrated in the hands of the president. Although Russia attempts to be democratic in its new constitution, it does not balance the powers of the three branches of government. 3. In Russia law is still very much a declaration that can be “improved” at any moment if it does not suit those having real power (in particular, the president). The Constitutional Ct.’s function is to adjudicate issues involving conflicts over constitutional issues. However, law and law enforcement institutions in the new Russian State are heavily politicized and do not serve as a third power that counterbalances the executive and legislative branches.
  • The idea of free labor – working for one’s benefit – had never been introduced or implemented in the general Russian population until after the fall of the Soviet Union. For example, factories were originally staffed by serfs, not free citizens. Most people in Russia spent their entire lives just trying to earn enough money to survive. A true market society never emerged before the Bolshevik Revolution. Stalin’s repressions made forced labor a common feature of life in the Soviet Union. However, in most occupations, hard work did not produce rewards such as a higher income, more consumer goods, or a better career. There was little motivation for individuals to work hard. Many had the opportunity to develop a solid professional career once marketization occurred, but hard work was hardly rewarded in the short or long run; promotions brought little improvement to income and were not performance based. The principle that hard work can lead to a better life was not a part of Russian work ethic. Russians developed entrepreneurial characteristics at a slow pace. They had very little experience with private business. The state-oriented structure strived to suppress the kind of entrepreneurship needed for success in a market economy. This term of “business” was a foreign concept to Russians. In the Soviet system, profit was considered an ideological evil, synonymous with capitalism. Schools teaching profit making have become a popular addition to the Russian culture these past 15 years, as everyone wanted to make money, but didn’t know how.
  • The emerging job market is a fairly new concept to Russia as well. Graduation from vocational school or college automatically led to assignment to a specific occupation and job. Typically job openings occurred only in jobs with the lowest salaries. Higher level jobs were only open to people with the necessary qualifications and experience relevant to the particular type of work. A change in occupation was extremely unlikely for the majority of the Russian population, in fact, even looked down upon. In 1996, a study showed that Russian adults in their early 40s averaged slightly over 2 jobs in their entire career. Very few people were oriented towards a career by actively initiated advancement at work. Promotions were the result of external evaluations by higher authorities; internal motivation and personal effort was regarded as secondary. The labor market in the new Russia developed rapidly. It produced both positive and negative consequences.
  • On the positive side, marketization has created new opportunities, and the most entrepreneurial people organized some segments of the labor force in private businesses. Now open competition for labor and jobs is commonplace. From this, two clear strategies of work behavior emerged: survival and an active search for a new career. Most people chose a survival strategy; often they had no other option. They simply tried to keep their existing job instead of searching for something better. Their focus was simply to have enough income to meet their basic needs. The second strategy consisted of actively searching for a new career. The emerging job market forced 17 year olds to adults in their 50s to compete for newly emerging job opportunities. Pas work experience was evaluated only in terms of present skills and abilities. The negative effects have been more visible. Many previous enterprises have closed slowly with people still officially listed as employed, but in reality, without any work or salary.
  • Egalitarianism is a social philosophy that advocates the removal of inequities among persons and a more equal distribution of benefits. Many officials in the USSR considered themselves a superior species, appointed to drive the herds of human cattle. Many Russians today still hold jobs because of nepotism, friendships, or former party membership and thus their systems are often not as efficient. (The result is often incompetence, sloth, conservatism, favoritism, and a tendency to avoid responsibility by passing the buck to higher ups). Many involved in bribery and embezzlement see it as the only way to survive. Russia is ranked 147 th on Corruption Perceptions Index 2008. They feel justified since, "everyone else is doing it." The police are notorious for corrupt behaviour. While Americans generally trust "the law," Russians have a tremendous distrust of government, police and the military. An extensive system of public schools blanketed the country, eliminated illiteracy, and raised the general level of learning among the populace. Russia has one of the lowest illiteracy rates in the world. A noticeable difference in the students is a lower ability to think for themselves. "Higher Level Thinking Skills" is an unknown term in Russian education. Students are told what the answer is, not why the answer is what it is. "How did you come to that answer?" is not a question a Russian teacher would ask. It is simply right or wrong. Two plus two is four. The reason why is immaterial. The New Russians : Russia has gone through several changes in the last few years. Visitors to Moscow just a couple of years ago would be very surprised at how "Western" downtown has become. Expensive shops line the main streets. International businessmen have rated Moscow as the most expensive city to conduct business, more costly that even Tokyo and New York. The term "New Russian" has been coined for many Russian businessmen, some being quite well to do, even by American standards. This new pursuit-of-the-gold mentality is affecting the culture in general. Large screen TVs, VCRs, car ownership, remodels of city and country homes are now all commonplace. The zeal for the almighty dollar, or more accurately, less-than mighty ruble, is affecting everyone from the rich to the pensioner. Materialism has even roosted on Russian relationships. Russians have always had time for each other so Walks with friends, long conversations on the phone, and meals together were of great importance but all that is changing now. With the pursuit of the microwave ovens and computers comes the requirement to work more hours, and for most Russians, at a variety of positions. While many Russians maintain their employ at their "main" job, such as being a teacher, or city employee, or doctor, they also have jobs on the side, such as tutoring, or selling things on the street, or developing a business. Perhaps the days of several workers standing around idly will come to an end...certainly a welcome thing for improving efficiency. The younger people are very open minded, well educated, and interested in new ideas. Russia is home to the largest number of billionaires in the world after the United States, gaining 50 billionaires in 2007 for a total of 110

Employment Relations in Russia Employment Relations in Russia Presentation Transcript

  • Employment Relations in Russia LIR 554: COMPARATIVE EMPLOYMENT RELATIONS 10/07/2008 Chinweoke Eke Deirdre Darnall Emmy Yimei Lin Kerri Kristich
  • U.S.S.R THE RUSSIAN FEDERATION•Founded after dissolution of Soviet Union in 1991.•Worlds leading natural gas exporter and 2nd leading oil exporter.•Largest stockpile of nuclear weapons of mass destruction in the world.•Second largest fleet of ballistic missile submarines and world’s top supplier of weaponsaccounting for around 30% of worldwide weapons sales.•One of the worlds fastest growing major economies and is the world’s largest country•Permanent member of the United Nations Security Council and the G8•2nd largest collection of billionaires in the world, gaining 50 billionaires in 2007 for a total of 110Ex-USSR countries: Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania,Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan
  • RUSSIACapital and states Moscow, 83 subjects grouped into 7 federal districtsLanguage(s) Russian, 27 other sub-official languagesPopulation 142 million (9th) ↓Religions Christianity, Islam, Buddhism, Judaism and atheismNominal GDP/Per capita $1.290 trillion (11th)/ $9,075 (54th)Unemployment rate 6.22% ↓Political system Representative democracyCurrency Russian RubleGovernment Federal semi-presidential republicEconomic system Mixed (Shifting towards Capitalism)Foreign perception Powerful
  • Russia: Its Politics
  • Political Structure• The Russian Federation• Three branch System – Executive Branch – Legislative Branch • Federal Council: republics, oblasts and krais, federal cities • Duma – Judicial Branch • Constitutional Ct. • Supreme Ct. • Superior Ct. of Arbitration
  • Political Parties• United Russia• Communist Party of the Russian Federation• Liberal Democratic Party of Russia• A Just Russia
  • Democracy or Not?1. Are Key Officials Elected by the People?2. Are Political Powers Divided Among the Branches of the State?3. Are Laws Supreme?
  • Russia: Its Economy
  • Economic FactsFiscal Year calendar yearGDP (nominal) $1.290 trillionGDP (PPP) $2.097 trillion (9th )GDP growth 8.1%(35th )GDP per capita $14,800(75th )Inflation 12%Average salary $640 per month (early 2008)Population below poverty line 15.8%Imports $260.4 billionExports $365 billion
  • Soviet Union (1922 to 1991 )Key word: Centrally Planned Economy• The Communist Party controlled all aspects of economic activity• Prices were ONLY an accounting mechanism• Plan Setting (five-year plan and annual plans): countrywide regional unit• Management: top down
  • Boris Yeltsin(1991-1999)• freeing nearly all prices• slashing defense spending• eliminating the old centralized distribution system• completing an ambitious voucher privatization program• establishing private financial institutions• decentralizing foreign trade
  • 1993 sm l ent er pr i ses al al l ent er pr i ses 15% 33% 67%85%St at e Owned Pr i vat e Owned St at e Owned Pr i vat e Owned
  • Vladimir Putin(2000-2008)
  • Dmitry Medvedev(2008-)Issues to solve:• Price• Privatization of Essential Sectors• Law **lack of legislation **lack of effective law enforcement **Government decisions affecting business are arbitrary and inconsistent
  • Its Employment Relations system
  • Labor Progression and Role of HR• Free labor & capitalism• Forced labor vs. true market – Little to no rewards for hard work – Little motivation• Entrepreneurial characteristics – “Business” – Profit making
  • Labor Progression and Role of HR• Previously assigned to specific occupation and job• Career changes frowned upon• No initiative for employees at work – Little reward through promotions – Internal motivation and personal effort considered secondary to external evaluation• Positive and negative consequences
  • Positive Consequences• 2 strategies – Survival – Active search for a new career Negative Consequences• Demise of previous enterprises
  • COMPARISONS RUSSIA U.S.AChecks and balances Low HighAuthority Centralized, flows down Diffused from people, flows upSocial philosophy Socialism → Capitalism Dominant capitalismRights Subordinated for common Celebrated, protected goodLiteracy & 99% / 6.22% ↓ 99%/ 4.6%Unemployment ratesHealth care Free, universal Primarily self-funded, Employer and National programsEducation Paid by Govt./ Free Primarily self-fundedRewards system No defined basis, thus low Meritocracy or Seniority motivation
  • SourcesModern Russia, Mikk Titma & Nancy Brandon Tuma. New York, NY. 2001.Developments in Russian Politics, edited by Steven White, Zvi Gitelman &Richard Sakwa. Durham, NC. 2005.http://en.wikipedia.org/wiki/Economy_of_Russiahttp://www.theodora.com/wfb/russia_economy.htmlhttp://www.goehner.com/russinfo.htmhttp://www.transparency.org/policy_research/surveys_indices/cpi/2008