Employment Relations in Russia

LIR 554: COMPARATIVE EMPLOYMENT RELATIONS10/07/2008

Chinweoke Ofuonye Deirdre Darnall Emmy Yimei Lin

Kerri Kristich

•Founded after dissolution of Soviet Union in 1991.•World's 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 weapons accounting for around 30% of worldwide weapons sales. •One of the world's 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 110

Ex-USSR countries: Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan

U.S.S.R

THE RUSSIAN FEDERATION

RUSSIA

Capital and states Moscow, 83 subjects grouped into 7 federal districts

Language(s) Russian, 27 other sub-official languages

Population 142 million (9th) ↓

Religions Christianity, Islam, Buddhism, Judaism and atheism

Nominal GDP/Per capita $1.290 trillion (11th)/ $9,075 (54th)

Unemployment rate 6.22% ↓

Political system Representative democracy

Currency Russian Ruble

Government Federal semi-presidential republic

Economic 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 Facts Fiscal Year calendar year

GDP (nominal) $1.290 trillion

GDP (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 billion

Exports $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

1993smal l enterpri ses

15%

85%

State Owned Private Owned

al l enterpri ses

67%

33%

State Owned Pri vate 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.A

Checks and balances Low High

Authority Centralized, flows down Diffused from people, flows up

Social philosophy Socialism → Capitalism Dominant capitalism

Rights Subordinated for common good

Celebrated, protected

Literacy & Unemployment rates

99% / 6.22% ↓ 99%/ 4.6%

Health care Free, universal Primarily self-funded, Employer and National programs

Education Paid by Govt./ Free Primarily self-funded

Rewards system No defined basis, thus low motivation

Meritocracy or Seniority

THANK YOU!

Sources

Modern 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_Russia http://www.theodora.com/wfb/russia_economy.html http://www.goehner.com/russinfo.htm http://www.transparency.org/policy_research/surveys_indices/cpi/2008